The Senedd met in the Chamber and by video-conference at 13:00 with the Llywydd (Elin Jones) in the Chair.

1. Questions to the First Minister

Y Llywydd / The Llywydd: Good afternoon and welcome to this afternoon's Plenary meeting. The first item on our agenda this afternoon is questions to the First Minister, and the first question is from Peter Fox.

Pressures on Farmers

Peter Fox AS: 1. What assessment has the Welsh Government made of the pressures that Welsh farmers face? OQ60800

Mark Drakeford AC: Llywydd, Welsh farmers face a range of pressures, including increased costs, EU exit barriers, hostile trade deals and the impacts of the climate and nature emergencies. We want a successful future for Welsh farming and continue to work with others to achieve it.

Peter Fox AS: Thank you, First Minister, and, Llywydd, I refer Members to my register of interests. We have all seen the way our rural communities have come together like no other time that I can ever remember, such is the concern, the anxiety and fear for the future that many farmers feel they face. Many feel they won't be able to achieve what the Government is asking through the sustainable farming scheme and, as such, are starting to consider life without farm support, and no doubt many will choose to exit the industry, especially our older farming community. A farmer fed back to me, following a roadshow in Monmouthshire, that, at the end of the meeting, he spoke to an official to ask what would happen if farmers didn't take up the scheme and how would the Welsh Government achieve its goals. The reply was that, 'We would need to regulate'. First Minister, if farmers choose not to embrace your scheme, and your targets were threatened, would the Government then consider regulating for the change it wants in the industry?

Mark Drakeford AC: Well, Llywydd, I want as many farmers as possible to take up the scheme that we will have negotiated with them. There's a very large sum of money available to those farmers who want to be part of the scheme. Of course, about half of farmers in Wales are not part of the basic payment scheme, so it's not as though this will be anything new. But what I want to see is I want to see farmers in Wales confident that their future can be sustained through membership of the scheme, with all the benefits that it will provide. That is what we are focused on. That's why we will look at every single response we get, as part of the consultation exercise, and then continue the conversation with farmers in Wales to devise a scheme that makes sustainable food production the heart of what they do, but which also delivers those public goods that are absolutely essential to Wales in an era of climate change.

Alun Davies AC: First Minister, we know what the pressures are that are facing farmers: increased red tape, a worsening economic situation, damaging free trade deals, a trail of broken promises. And we know that because that was in Farmers Weekly. Farmers Weekly demonstrated that nearly 70 per cent of farmers are facing the negative response of Brexit, and no matter how the Conservatives dress it up—[Interruption.] No matter—. Well, I'm quoting Farmers Weekly; I don't need to listen to the Conservatives. And if you don't believe Farmers Weekly, why don't you listen to Ian Rickman, the president of the Farmers Union of Wales?
'The industry was more or less chucked under a bus'—
chucked under a bus by a Conservative Government who talks long and acts like it doesn't care about the future of agriculture. First Minister, do you agree with me that the greatest pressures facing agriculture are as a consequence of Brexit and that nobody in their right mind would set up trade barriers with theirr biggest, greatest and closest markets? The best thing we can do to support agriculture into the future is to rejoin the European Union.

Mark Drakeford AC: Well, Llywydd, as I've said before, you always know, with the Conservative benches here, the weaker their argument, the louder they shout, and they're shouting again this afternoon. And they're shouting because they simply don't want to recognise the truth. [Interruption.] The truth is this, isn't it, that the advice that was provided by the Welsh Conservative Party has placed new barriers in the path of farmers in Wales hoping to trade with their nearest and most important market. Now, before Brexit happened, before a deal was struck, the Welsh Government highlighted the impact of leaving the European Union on mussel farmers in north Wales. Here was a successful industry—an industry that had been built up over 20 years. Ninety per cent of its product went to the southern Mediterranean. Ninety nine per cent of that no longer does. There's no point in the leader of the opposition saying to me it still does; it absolutely does not. They are unable to send—[Interruption.]

Y Llywydd / The Llywydd: Allow the First Minister to respond—[Interruption.] No, allow the First Minister to respond, otherwise I won't be calling Members when they choose to be called later on because they've sought to interrupt earlier in proceedings. So, let's just listen to the First Minister in his now response now, please.

Mark Drakeford AC: I'm afraid the facts and the figures speak for themselves. That industry is no longer able to send its product to the southern Mediterranean in a way that it arrives safe and saleable. And that is a direct result of the deal that was struck when we left the European Union. A different deal was possible. A different deal was advanced by this Welsh Government that would have saved the economic interests of farmers here in Wales, while the Conservative Party, egged on by the Welsh Conservatives, failed to do exactly that.

John Griffiths AC: First Minister, I'm glad to see that work has begun on a review of agricultural pollution regulation, because evidence shows that those regulations are badly needed. For example, the River Usk—which, of course, the constituency Member for Monmouth, Peter Fox, will know very well—is in a very poor condition, and figures show that around two thirds of the responsibility for that poor condition is agricultural pollution, and this coming at a time when there are three major pollution events in our rivers every single week. First Minister, will the forthcoming summit to look at these issues, which I believe is next week, look at the contribution that every sector can make to the progress that is so badly needed?

Mark Drakeford AC: I thank John Griffiths for that, Llywydd. I look forward to taking part in the next summit, which will happen on 18 March. The point John Griffiths makes is just inescapable. Sixty seven per cent of all the phosphate loading in the Usk, which has had such a detrimental impact on that very important habitat, comes from agricultural sources. No one source can solve the problems of our rivers, but agriculture, alongside Welsh Water, alongside the actions we're taking to deal with urban run-off, absolutely has to play its part. That's why those regulations are in place. The Minister has announced that she will start work on the review of the regulations early. She'll appoint an independent chair to lead that work. That's all very important. But the problem doesn't go away simply by looking away from it, and in our rivers, in all but one of them, the single greatest contribution to pollution in our rivers, and phosphate pollution in particular, comes from agricultural sources.

Care-experienced Young People

Jane Dodds AS: 2. What progress has the Welsh Government made on delivering the commitments made to care-experienced young people in the declaration agreed at the radical reform summit in December 2022? OQ60778

Mark Drakeford AC: I thank Jane Dodds for the question, Llywydd. On Saturday, I attended the third summit led by care-experienced young people to report to them on our radical reform agenda. They celebrated the progress already made through the declaration and made a series of proposals for further action.

Jane Dodds AS: Thank you very much for that response.

Jane Dodds AS: There are many champions here in the Siambr and across all of our political parties for care-experienced children—James Evans, Sioned Williams, Jayne Bryant, just to name a few, and, of course, the Minister as well, and thank you to you all. But, First Minister, if I may say, one of the biggest champions here in the Siambr is you. You have really led in relation to meeting the needs of our care-experienced children. Two weeks ago, I had the honour of sponsoring an event at the Senedd, which had apparently the biggest scarf, at the moment, in Wales. Hundreds of people from all over Wales dedicated their time to knitting a square or a part of that scarf—there were nearly 8,000 squares in that scarf—and I believe it's still growing. Every square represents a child or young person currently navigating the care system here in Wales. So, I was pleased to learn of the address that you made to the summit on radical reform only this weekend, and I’m pleased that this issue is one that I’m covering in what may be my last question to you as First Minister, given, as I know, its importance to you. What we need is a major culture change in relation to care-experienced young people in Wales, and I just wonder if you could update us on how the Government will achieve that culture change across Wales. Diolch yn fawr iawn.

Mark Drakeford AC: I thank Jane Dodds for her kind words there.

Mark Drakeford AC: The Member is right, Llywydd—there are champions on behalf of looked-after children right across the Chamber. Many of us will remember the work that David Melding carried out so consistently during his time on these benches. But had Jane Dodds been at the summit on Saturday, I feel sure she would have come to the same conclusion as me—that the greatest champions of all are those young people themselves. They were absolutely fantastic at the summit—so articulate, so insightful, so determined to make their contribution to a different future for themselves, but also a different sort of service for those other young people in the system. They were absolutely insistent that we amplify their voice in the whole service. 'With us, not for us', they kept saying. That’s what the system needs to be—'with us, not doing things to us or on our behalf'. And what did they want? They wanted the simplest things. They wanted stability, consistency, early help, advocacy services for parents when families are trying to stay together rather than children being removed from them. They wanted us to attend to the gaps that are still there when children fall between social services, housing, criminal justice, mental health, and, above all, they wanted us to be ambitious for them. They didn't want a sense of, 'Oh, that’s good enough because that child is a child in care'; they wanted everyone and every service to be absolutely ambitious on their behalf. It was a privilege to report to them on the actions that we have taken, and it was even more of a privilege to hear directly from them about how we, with the determination that they have, can go on with that radical reform agenda that those young people want and absolutely deserve.

Altaf Hussain AS: Thanks, Jane, for raising this issue, and thank you, First Minister, for your perseverance and what you said. First Minister, the declaration commits the Welsh Government to delivering upon the vision, giving it priority over the next few years and ensuring that all Ministers deliver upon the commitments outlined in the vision. A key part of the vision is that no child or young person will be taken into care unless everything possible has been done. Sadly, this does not appear to be happening. Over the past year, there has been yet another increase in the number of children in care. What action is your Government taking to reduce the number of young people entering the care system in the first place?

Mark Drakeford AC: Llywydd, can I say how pleased I am to hear that question from the Member? Many years ago, when I was the health Minister, I used to argue on public platforms that we took too many children away from their families here in Wales. We do it at a rate that far exceeds local authorities in England, and the gap between Wales and England has widened over 20 years. But when I would make those points on public platforms, I often knew that my audience was not convinced, and it's really heartening to hear the Member, Llywydd, add his voice to the campaign we need in Wales to make sure, in his words, that no child is taken into care in Wales unless everything possible has been done to help those families stay together during very difficult times.
Now, I have always recognised there will be some unavoidable circumstances where children do need to be taken into the care of a local authority, and that's why we need to do the very best by them when that happens. But our real efforts should be directed to de-escalation, to move more children back to their families, more children who are looked after outside their county back closer to home, more children who are looked after outside Wales back to facilities that we can create in Wales, again closer to where their families live. We're investing £68 million to create new in-house capacity for local authorities, including capacity for young people with complex needs who, at the moment, have to be looked after elsewhere. In that way, we can achieve the ambition that the Member articulated so clearly: that we work to keep children with their families wherever possible, and only when every effort has been made and cannot succeed do we take children away from their families and into public care.

Sioned Williams AS: Yes, the importance of preventative intervention and advocacy. I was a member of the Children, Young People and Education Committee when we held our inquiry to look at the radical reforms that were needed for the care system, and one of our recommendations was trying to tackle the structural prejudice that is experienced by young mothers as a result of their experiences in care, which means that they're referred to child protection services whilst they're pregnant, sometimes without explanation.
NYAS Cymru, with a Government grant, supplies intensive support for young women who are care experienced through Project Unity, and the Government accepted in principle the recommendation of our committee that such a model should be available as a statutory right. But NYAS Cymru has expressed concerns about the Government's commitment to decreasing the high rate of children under a local authority protection order who are children of care-experienced mothers, because long-term funding hasn't been earmarked for Project Unity. So, could you reassure us, First Minister, that the Welsh Government will continue with this funding, to continue with the vital and excellent work of NYAS Cymru and Project Unity?

Mark Drakeford AC: Thank you very much to Sioned Williams for that question. We as a Government don't have long-term funding—that's the problem. We don't have funding following the next financial year. But I am confident that the future Government will want to invest in the lives of young mothers. We know that many people who've been through the care system, when they become adults, see their children taken into the system too, and that's why we want to invest in their lives. We're all aware, of course, of the financial constraints and the problems that we're currently facing. But when we do invest in the lives of young people in the position that Sioned Williams outlined, then we are investing in all of our futures, and we are avoiding future problems and costs too.

Jayne Bryant AC: I had the privilege of attending the care experience summit, along with you, Prif Weinidog, and other Ministers, and I'd like to echo the words of Jane Dodds around your personal commitment to these young people. Throughout the day, we listened to and learned from young people about their ideas to radically reform the care system to help others. Many points will stay with me from Saturday, but one young person said, 'You talk about stranger danger and then you ask us to go and live with them.' That really hit me, and I'm sure others there as well. To help make things easier, those young people suggested creating a profile page, in genuine collaboration with young people, to help understand who they are, and for the people they're going to live with to do the same, with details like favourite food, and photographs as well.
The Senedd's Children, Young People and Education Committee has recently launched an inquiry into children on the margings, during which we'll look at missing children and statutory services responses across Wales. This chimes with what the young people spoke about on Saturday. They called for mandatory return interviews every time a young person goes missing, so that everyone has the chance to talk to someone independent about why they ran away. Seemingly small changes like this can make a really big difference. Prif Weinidog, would you agree with me that it is essential that we continue to find ways for those with lived experience to meaningfully influence policies and practice in the care system, and that we should thank those young people for the invaluable work they are doing to help make a significant difference to other young people?

Mark Drakeford AC: I thank Jayne Bryant for the question, for the work that she and her committee have done in this area, and for being at the summit on Saturday. I said in my original answer to Jane Dodds that so many of the ideas that young people put to us are simple ideas, they're not costly ideas, but they are ideas that make a real difference. I was absolutely struck by what that young person said about how their life is boiled down to a single page and they don't have any say in what is said on that page, either. The page is written for them by somebody else. When they go to a foster carer, they have nothing in return, and what they said was two things. First of all, 'If that page is my page, then I ought to be part of writing it', and, 'If my page is going to somebody else, then I'd like a page back in return so that I know something.' It's that stranger point you made. You are being asked to go and live in a household that you've never been to and amongst people you've never met. It seemed the simplest idea that a young person would know something about the place they were going to, and a simple page would have made a real difference. It's that sort of idea, and the idea of an interview with a young person who has run away when they return—. Why would you not want to sit down and ask that young person about what lay behind the actions that had taken place in their lives? That's why those conversations and the summit are so valuable, because you do hear directly from those young people themselves. I absolutely pay tribute to them. As I said to Jane Dodds, they have no greater champion than themselves, and we're really fortunate in Wales to have young people prepared to step forward and play that part.

Questions Without Notice from the Party Leaders

Y Llywydd / The Llywydd: Questions now from the party leaders. The leader of the Welsh Conservatives, Andrew R.T. Davies.

Andrew R.T. Davies AC: Thank you, Presiding Officer. Last week, First Minister, we heard from the COVID inquiry that you do use WhatsApp regularly. On 7 November, when I questioned you on this particular issue, you said that you didn't use it, and then you clarified on 8 November that you used it but not very often. Can you confirm whether you do use WhatsApp regularly, as in the evidence that was put to the COVID inquiry last week, in particular when it came to policy and rule decisions?

Mark Drakeford AC: I am a witness at the COVID inquiry. I will answer their questions, whatever points they put to me. I am not going to offer a preview of what I say to the inquiry. I will pay the inquiry the respect I think it believes, and I will give my answers to them as a witness.

Andrew R.T. Davies AC: I would seek direction from the Presiding Officer, because this is the Welsh Parliament. This evidence is publicly available. I am sent here by the people who voted for me, like other Members, to seek answers on behalf of the people of Wales from the Government. I am not trying to introduce new information. You have put on the record on 7 November that you did not use WhatsApp. On 8 November, you clarified that by saying you infrequently used WhatsApp, and then, in evidence that was submitted, all publicly available, that you used it regularly and in relation to rule setting and background information. It is perfectly legitimate, is it not, to come to Parliament and seek that clarification from the head of the Government when that information is already in the public domain. A little over two to three hours later this afternoon we will be debating a Bill that seeks to increase the capacity of this Parliament. It can't be just questions that you like that you answer; you should answer the questions that deserve answers to give clarity to people who want those answers, such as the COVID bereaved families. So, I ask you again, First Minister: can you clarify the point that I've put to you?

Mark Drakeford AC: I clarified my position on 7 November. I've nothing to add to that. The inquiry has heard from others. If the inquiry wishes to ask me questions on the points that they have heard about, of course I will answer the inquiry, but that is where those answers will be provided.

Andrew R.T. Davies AC: Can I seek your support, Presiding Officer? Surely Parliament deserves greater respect than that.

Y Llywydd / The Llywydd: The First Minister is responsible for the content of his own answers, and that's not a matter for me. I would say that the inquiry is to question the First Minister, and the First Minister will be appearing before the inquiry next week, so shall we leave it—for now—that the First Minister will be providing possibly more evidence and answers to the inquiry? We'll leave it for now that that's the case, and I'm sure that this matter will be returned to at a future date, once that inquiry has concluded its evidence session with the First Minister and other Ministers.

Andrew R.T. Davies AC: The First Minister stands down in two weeks' time. I have tried to seek answers on information that is in the public domain. I can't get that here in the Welsh Parliament. That is a damning indictment of Welsh democracy, I would say.
I'll ask you another question, if I may, in relation to special advisers, which you appoint, but I think I'll most probably get the same response. People, especially the COVID bereaved families, will see the arrogance and contempt that you are dealing with here, First Minister. It was highlighted in remarks from the barrister in the COVID inquiry last week that special advisers were going round systematically and suspiciously deleting communications. They are not my words; they're the words that were used in the COVID inquiry. It further went on to say that senior advisers, special advisers, had agreed to clear out WhatsApp inboxes every week. Were you aware of that? Because you appoint the special advisers. There is a code that obviously governs the conduct of special advisers, and ultimately, they're accountable to you. So, on that principle of responsibility, were you aware of that activity during the COVID pandemic about deleting messages?

Mark Drakeford AC: The allegation that the leader of the opposition repeats this afternoon was made by a barrister who asks questions of witnesses at the inquiry. That is why I will not indulge in what he wishes me to indulge in this afternoon. I want to—[Interruption.] Llywydd, the leader of the opposition—. I cannot tell him the contempt I feel for a person who sits there and uses words like that to me. I answer his questions truthfully every single week and I will answer the questions truthfully in front of the inquiry. The person who you have quoted will be at the inquiry, will be able to put points to witnesses, including special adviser witnesses. I will respect the inquiry; he never has, and he continues to denigrate it in his questions to me this afternoon.

Y Llywydd / The Llywydd: For information to all Members, the First Minister will be answering questions two weeks today, which will be a week after the inquiry, so I'm sure that there will be issues that Members here may want to return to after they've reflected on the First Minister's evidence to the inquiry.

Y Llywydd / The Llywydd: Plaid Cymru leader, Rhun ap Iorwerth.

Rhun ap Iorwerth AC: Diolch yn fawr iawn, Llywydd. It is our duty as parliamentarians to hold Government and the First Minister to account, and that is as true for the issue of COVID and the COVID inquiry as it is for any other issue. I also want to pursue issues arising from evidence that we have already heard in the COVID inquiry, not what may be asked of the First Minister when he gives evidence.
I also wish to pursue the issue of WhatsApp messages. The First Minister initially said he didn't use WhatsApp, then had to correct the record to say that in fact he did. We've learnt that WhatsApp messages from the then health Minister during the pandemic had been deleted, that the First Minister's chief special adviser had instructed Ministers to clear out WhatsApp messages once a week. This was months, seven months in fact, after an e-mail was sent reminding Welsh Government staff to preserve records for any future inquiry.
The reason I ask this is that anything that takes away the fullest possible account of the goings-on in Government during COVID means Government isn't being as transparent as it can be with the families of those who lost loved ones, as well as with us as parliamentarians. Will the First Minister concede that deleting messages, no matter how informal, was not only wrong, but also in breach of his Government's own rules?

Mark Drakeford AC: The same answer applies to the leader of Plaid Cymru as it does to the leader of the opposition. The inquiry is here to ask those questions. That's why it is in Wales. I'm not going to offer a preview of the questions that I will be asked as a witness to the inquiry.

Rhun ap Iorwerth AC: I'm not attempting to preview what questions the First Minister might be asked by the inquiry. These are my questions, doing my job in holding Government to account in the Welsh Parliament. And answering my question would in no way prejudice the First Minister's evidence to the inquiry. It is clear from the evidence of Wales's chief medical officer that Government was too slow to engage with the emerging pandemic, and that, as it evolved, there was a sense of chaos. Good governance and decision making was being hampered by the fact that the chief medical officer had inadequate support to enable him to keep on top of his workload. The Welsh Government didn't formally discuss COVID until one month after Frank Atherton's warning to the First Minister that it was likely to arrive in Wales. When it did arrive in the UK, the then health Minister told Cabinet incorrectly that it hadn't.
With the benefit of hindsight, and based on what we have already heard at the inquiry—not what may be asked of the First Minister next week—does the First Minister believe that Cabinet colleagues at the time were on top of their briefs, and that Government as a whole was keeping up with the emerging situation?

Mark Drakeford AC: Well, Llywydd, I answered questions in front of this Senedd with astonishing regularity all the way through the COVID experience. From 28 January onwards, Members of the Senedd were provided with a weekly update by Welsh Ministers of the evolving picture of COVID elsewhere in the world. The day after a lockdown was announced, I was answering questions on the floor of the Senedd. The Senedd took no recess in Easter of that year. I answered questions three times during the summer recess on the floor of the Senedd. Those answers are there on the record. Any further questions that the inquiry want to ask of me, I will wait for the inquiry to ask me. That is how you respect the process that the inquiry has been set up to deal with, and that's what I will do.

Rhun ap Iorwerth AC: I will invite the First Minister to consider the questions that I'm asking today in light of nearly four years of questioning by this Senedd on matters relating to the way that Government handled the COVID pandemic. My party, from the very early days of the pandemic, called for a Welsh-specific inquiry, for work to be carried out during those early days of the pandemic—not taking away from the efforts of Government at the time to deal with the pandemic—to prepare for having a Wales COVID inquiry. Every piece of evidence published, every testimony delivered during these three weeks, or up to now in this COVID inquiry, strengthens the case, I believe, for that Wales-specific COVID inquiry. And what we're hearing, of course, is only scratching the surface. All of this tells me that denying Wales its own inquiry—as we on these benches have called for, from the early days of the pandemic—has been a serious error of judgment by the First Minister and his Government.
In light of what we have seen over the past four years, and the lessons we know we need to learn, and not prejudicing what might be asked of the First Minister when he gives evidence, will the First Minister reflect on that and agree that, had a decision been taken early in the pandemic, we would have been in a position to carry out that Wales COVID inquiry that the bereaved families so desperately need?

Mark Drakeford AC: Well, I've explained many times on the floor of the Senedd, Llywydd, why I don't think that a Welsh-specific inquiry would give families in Wales the answers to the questions that they absolutely properly ask, and on which I am determined to help find those answers. And I entirely disagree with him; I think every witness in front of the inquiry demonstrates that you could not understand the actions taken in Wales in isolation from the decisions that were being made elsewhere. And a Welsh-specific inquiry simply would not be able to investigate those connections.
Now, you see, I hear the leader of Plaid Cymru say that the inquiry has only scratched the surface. That's why I won't indulge in answering questions of the sort that have been put to me this afternoon, because that is so disrespectful of the inquiry process. The inquiry—[Interruption.] The inquiry is only halfway through the work that it will do directly here in Wales. There are Members of the Chamber, I think, who've never had confidence in the inquiry to do the work that I think it is set up to do. I want that inquiry to succeed. I want that inquiry to provide the answers that people in Wales look for. And I will be there to give evidence myself, to assist the inquiry in doing that.

The Development of Senedd Cymru

Huw Irranca-Davies AC: 3. What is the First Minister's vision for the development of Senedd Cymru over the next 10 years? OQ60761

Mark Drakeford AC: Llywydd, I would want a Senedd that, over the next decade, continues to embrace the progressive agenda of the first 25 years of devolution, equipped now with greater capacity and a membership that fully reflects the diversity of contemporary Wales.

Huw Irranca-Davies AC: I've phrased this question deliberately, First Minister, because I understand that, shortly, you'll be joining me on the back benches here, stepping back from the driving seat. It's often described as a journey, this devolution process, and during that journey you've either been in the driving seat, as in the last five years, or in the passenger seat, giving instructions—including as far back as our late friend, Rhodri Morgan, as well, and directing him. So, it's deliberately phrased in this way because we are going to be debating over the next couple of days measures that, if they have the Senedd's approval, will strengthen the capacity of this Senedd to scrutinise Government, will give the potential for greater diversity, to really reflect the type of people from right across Wales, from every walk of life in Wales, and every background. But would he agree with me that the unfinished business of this devolution journey is how we go beyond this place, and we actually devolve power, greater, out to the regions and the localities and the communities in Wales? It's a process we've started, but does he agree with me that we could actually go much further?

Mark Drakeford AC: Llywydd, I defer to the experience of Huw Irranca-Davies in relation to regional bodies, following the work that he did and led on regional economic development post Brexit. Of course, as he was doing that work, the powers that were here in this Senedd to shape regional economic development and the money that went with it were both being taken away from Wales. The leader of the opposition has been busy shouting at me from his seat about truthfulness. I remember that he promised people in Wales that they would not be a single penny worse off as a result of Brexit. Where was the truth in that, Llywydd, I wonder, because the money that was here in Wales for regional economic development was taken away from Wales. Where was the truth in his answers to questions in those areas? No, he's got no answer to that this afternoon, you can be quite sure, Llywydd.
I agree, of course, with what Huw Irranca-Davies has said, that the job of devolution never stops at Cardiff, that we are also in and always in the process of offering greater decision making to other tiers of government here in Wales. I'm struck by how much of the legislation that comes before this Senedd is about strengthening the role of local government here in Wales, from franchising under the bus Bill, to the role that they will play in coal tip safety. And I am very proud, Llywydd, of the work that has gone on in this Senedd term, much of it with Plaid Cymru, under the co-operation agreement, to deal with second homes here in Wales—actions, of course, now being copied by a Conservative Government in England. Those actions rely on us strengthening the powers of local government in Wales, to deal with that problem. And of course, I look forward very much, beyond the time that I am First Minister, to the visitor levy being passed through this Senedd—another measure that will put into the hands of our local authorities new powers, which they will decide upon, whether they want to use them, and how they go about it.
So, I think this Government has a strong record already. It will go on strengthening that record, to make sure that we devolve power beyond this Senedd, and put it in the hands of other parts of our democratic fabric, where those decisions are better made closer to where people live.

James Evans AS: First Minister, I want to see Welsh democracy develop, and this Senedd become the best it can be to represent the people of Wales. First Minister, you believe that increasing the Members in this place will increase scrutiny; I respectfully disagree with you. Since being a Member of this Senedd, I've had the pleasure of sitting on two committees—the Children, Young People and Education Committee and also the Legislation, Justice and Constitution Committee. When I've sat on those committees, we've put forward some very good evidence-based recommendations to the Government around legislation, and on ways in which the Government could improve its policy. However, time and time again, they're either being accepted in principle or being rejected, which is actually disheartening to many Members on those committees who are putting good scrutiny forward to Government.We've also seen the Welsh Government using Westminster more and more to legislate in devolved areas when this Senedd could actually scrutinise and do that legislation. So, First Minister, how can you assure me and other people out there that, actually, increasing the number of Members is going to increase scrutiny, when it seems that the Government here at the minute don't seem to want to accept the scrutiny that's being put forward by the Senedd and are also using other Parliaments to legislate when we could do it here? Surely, that does weaken the argument that you're putting forward today.

Mark Drakeford AC: Well, Llywydd, by far, the bulk of legislation that's been passed in Westminster in devolved areas has been legislation passed in the teeth of the refusal of consent by this Senedd. The number of examples of where we have used Westminster legislation for Welsh purposes is very small and it has been part of a whole history of devolution. It's built into the devolution settlement that if there is a Bill at Westminster where it is in Welsh interests that we allow that legislation to happen—. In the case of leasehold reform, for example, it really would not make sense for us to legislate alone in Wales on a matter that is so bound up in cross-border concerns. So, there are good reasons why we very occasionally use that. The truth of the matter is: Westminster under the Conservative Government since 2019, not beforehand, but since 2019, has repeatedly legislated in devolved areas when this Senedd has refused consent to do so.
I completely disagree with the point the Member makes about scrutiny. Scrutiny is not about committees of the Senedd producing reports and then Government having to accept them wholesale. Committees produce reports. This Government has a very, very good record of accepting the bulk of recommendations, but there will be times when Government takes a different view. That's absolutely how the system must work. Anything else would simply be a negation of the parliamentary system that we have here in Wales. I was pleased to hear what the Member said in his first sentence. I share his sentiments there entirely. I believe that a reformed Senedd with greater capacity will improve scrutiny and that that improved scrutiny—not only will it lead to better policies, but it will mean that money, which is spent in Wales, is spent in the most effective way.

Adam Price AC: First Minister, both the candidates to succeed you as leader of the Labour Party in Wales have previously expressed their support for the principle of mandatory participation in elections as an universal civic duty. If a proposal were made to include that in the Labour manifesto for the Senedd elections for 2026, is that something that you would support from the back benches and as an ordinary member of the Labour Party?

Mark Drakeford AC: Well, Llywydd, I thank the Member for tempting me down that path [Laughter.] Look, I am on record many times, over 40 years—. I am a believer in mandatory voting. It seems, to me, a basic civic duty. Any one of us in a democracy ought to be prepared to take part in the most basic form of that democracy. You don't have to vote for anybody. You can turn up and write 'None of the above', you can do whatever you like, but I have always believed that it is a simple, democratic duty that each one of us ought to discharge to be part of the democracy that we value so much here in Wales. For anything to get into a Labour manifesto—there is a lengthy process of those ideas emerging from the party itself, being tested in various parts of the process. Whether an idea of that sort would survive the scrutiny internally of the Labour Party I do not know. But I am sure of this: that although I myself have always believed in participation of that sort in democracy, no party could put it forward on the floor of the Senedd here without it having been in a manifesto and that manifesto having been endorsed by the people of Wales in a Senedd election.

Childcare Provision

Vikki Howells AC: 4. Will the First Minister make a statement on childcare provision in Cynon Valley? OQ60802

Mark Drakeford AC: I thank Vikki Howells, Llywydd. Expanding childcare provision has been a key achievement of the first three years of this Senedd term, accelerated through the co-operation agreement with Plaid Cymru. With the committed help of RCT council, hundreds of new families are now benefiting from quality childcare in the Member's constituency.

Vikki Howells AC: First Minister, the Welsh Government's childcare offer has been available across Wales since 2019 for eligible parents of three and four-year-olds and has since been extended to those in training and education, foster carers and kinship carers. The latest evaluation found that 75 per cent of recipients said it made it easier for them to undertake work, and now Flying Start childcare is supporting more two-year-olds across Wales. But, last week, the Prime Minister accused the Welsh Government of pocketing funding received as a rare consequential of their childcare announcement, instead of funding childcare provision here in Wales. So, First Minister, would you agree with me that this Prime Minister just doesn't understand devolution and that the UK Government cannot dictate how Wales spends its budget?

Mark Drakeford AC: Well, Llywydd, the Prime Minister was doing his best, as he often does, to distract attention from the failure of his own Government. You'll remember the fanfare with which he announced that childcare would be available for younger children in England, only to find, of course, that he can't deliver on that promise either, alongside a long list of other promises he's not been able to keep. Because what he found was that the 'pile 'em high and fund 'em cheap' approach in England simply founders in the face of the challenges that the sector itself faces.
Here in Wales, we provide rate relief for the childcare sector; you don't get that in England. We provide £70 million of capital investment to allow the sector to grow, to improve the premises, to create new settings in which children can be looked after. We invest in the workforce to make sure that they are properly trained and equipped. Our main childcare offer, Llywydd, now has a take-up rate of 60 per cent, one of the highest ever. Thirty-six per cent of all premises in RCT are regarded by the inspectorate in Wales as excellent, compared to 26 per cent across Wales as a whole.
Here in Wales, we are determined to see quality childcare, childcare that is focused on the needs of the child, that allows that child to grow up in the best possible circumstances. The excellent news of the Flying Start investment made alongside Plaid Cymru in the co-operation agreement is that the latest evidence is telling us that children from those less-well-off families who get that investment early in life, those children go on to enjoy the same chances as children who live in more advantaged households.

Supporting People with Diabetes

Natasha Asghar AS: 5. What steps is the Welsh Government taking to support people with diabetes in South Wales East? OQ60798

Mark Drakeford AC: I thank the Member for that question, Llywydd. Actions in Wales focus on diabetes prevention, helping those with diabetes to manage that condition and improve access to diabetes technology such as pumps and blood glucose monitors. Responsibility for implementing these actions lies, of course, with local health boards.

Natasha Asghar AS: Thank you so much for your response, First Minister. I want to draw your attention to an innovative company in Caldicot in my region of south-east Wales that is developing a product poised to transform the lives of people with diabetes. Afon Technology is developing the world's first wearable, non-invasive blood glucose monitoring device, which will eliminate pain and discomfort for users. Unlike current devices, Glucowear will measure blood glucose levels in real time, without the need to penetrate the skin at all, making it easier to manage the condition, reducing the rate of diabetes-related complications such as heart attacks, strokes, blindness, kidney failure and limb amputations.
This idea was conceived in Wales and the company want to make sure that their operation stays in Wales, First Minister. It really is a Wales success story. So, I'd like to know, First Minister, what support can the Welsh Government provide to Afon Technology as their exciting plans progress. Undoubtedly, you have always been an avid supporter of any places, groups and organisations I've suggested to you before, First Minister; I'd be more than happy to discuss this with you later, and I know your time in office is coming to an end, but, if you do have time, I would strongly encourage you to please visit the Afon Technology team. Thank you.

Mark Drakeford AC: I thank Natasha Asghar for that supplementary question, Llywydd. I read the article that she'd posted on her website, which provides further detail in addition to the detail that she's provided to the Chamber this afternoon. Afon Technology is very much at the cutting edge of work in this area and its latest device is at the trial phase. We absolutely welcome its work. In the here and now, Llywydd, as Members will understand, the focus of the NHS is on implementing those mature technologies that already have regulatory approval. Afon Technology's idea is on that pathway. The Welsh Government, of course, will be happy to assist them as that work progresses and look forward to the day, if the technology is able to prove itself, when it too will be approved by regulators and then will be available to patients here in Wales and far beyond.

Delivery of Health Sevices

Paul Davies AC: 6. What is the Welsh Government doing to improve the delivery of health services in Preseli Pembrokeshire? OQ60781

Mark Drakeford AC: Llywydd, last month, the Welsh Government awarded £1.6 million to support plans for a Fishguard health and well-being centre, the latest action to improve health services in the Member's constituency. The centre will bring together organisations to deliver services in the community, where, of course, most people receive their healthcare.

Paul Davies AC: First Minister, one way to improve the delivery of health services is to make sure that ambulance response times improve. Now, at the start of this year, I was contacted by a constituent who informed me that her daughter-in-law had waited over an hour and a half for an ambulance after having a heart attack on Christmas Eve. Unfortunately, she passed away at the age of 40, leaving two small children, and the family are absolutely adamant that, if the ambulance had arrived in a timely manner, then she would have survived. I'm sure you'll therefore agree with me that that is absolutely appalling, and my heart goes out to the family.
Now, I did write to the health Minister on behalf of the family in January, and I'm still waiting for a response. So, I'd be grateful if you could tell us what the Welsh Government is doing to improve emergency services like ambulance response times in Pembrokeshire. And, more importantly, what lessons are being learned from incidents like this so that they're not repeated in the future?

Mark Drakeford AC: Well, Llywydd, first of all to agree with what Paul Davies said about the distress that the family will be experiencing, and, of course, the circumstances that he reports need to be investigated and answers to the family need to be provided. I'm not myself aware of those circumstances and don't think I could say anything more directly on the particular case this afternoon.
More generally, the Welsh Government goes on doing the things that we have done in recent times: investing in the ambulance service. More people work in the ambulance service than ever before. We invest in the equipment that the service has, and we invest in those additional services that try to make sure that ambulances are only used in those circumstances when an ambulance itself is the right answer. So, he will know that I think it is something like 17 per cent of 999 calls are now successfully resolved by clinicians over the telephone, so that an ambulance doesn't need to go to calls where an ambulance isn't the right answer. And that combination of investment in people, in equipment and in services will, I believe, make sure that the ambulance service continues on the journey of improvement, and there is an improvement journey that needs to be undertaken.

The Environmental Legacy of Coal Mining

Delyth Jewell AC: 7. Will the First Minister make a statement on the environmental legacy of coal mining in South Wales East? OQ60766

Mark Drakeford AC: I thank Delyth Jewell. Llywydd, there are 2,566 disused coal tips in Wales, and that is approximately 40 per cent of all coal tips in Great Britain; 656 of those are situated in South Wales East. Our coal tip safety programme, including an inspection and maintenance regime and a new disused coal tips Bill, has community safety at its heart.

Delyth Jewell AC: Our Valleys paid a terrible price for the coal that was ripped from the earth beneath our feet—riches that were carried out of our communities, leaving us with dust that clogged the lungs of miners and soot and muck that was left littering our mountains. The coal tips, the rubbish that still darkens our horizons—those tips are a lasting reminder of Westminster's contempt for Wales, because, even though they predate devolution, the UK Government refuses to pay towards clearing them, towards making them safe, preventing another Aberfan from happening. First Minister, you will shortly be leaving this office; do you agree that these tips are the legacy of more than mining, but Westminster's negligence that must be challenged? Those tips tell a story. They speak of generations of indifference and cruel disdain. Will you pledge in your final weeks in this role to do all you can to demand from the UK Government that this cost too shouldn't be one our communities should bear alone?

Mark Drakeford AC: Well, Llywydd, Delyth Jewell is absolutely right about the story that those coal tips tell of Wales's natural resources being exploited, not to the benefit of those communities, as we know, but to the benefit of people far away from where those resources were to be found.
Now, in an era of climate change, the tips that are left are no longer safe for the future. That is why we are investing £44 million ourselves in the resilience of coal tips across Wales. We've asked the UK Government for a contribution to that. We haven't asked them to fund it all. In fact, we've asked them for £20 million to match the £44 million that this Senedd will be providing, and the answer comes back that they will not do that. And in that answer, they are, I believe, Llywydd, in fundamental breach of the statement of funding policy, which says that liabilities incurred before devolution should be met by the UK Government. Those coal tips were there far, far before this Senedd was created, and keeping them in a state of good repair is something in which the UK Government ought to take a direct interest, not as the major provider, but as a provider alongside the Senedd. And the refusal to do so I think does tell you something bigger than the issue itself. It does tell you something about the utter disregard that the current UK Government has for its own responsibilities and for living up to its responsibilities to demonstrate that it has an interest in every part of the union that is the United Kingdom.

Y Llywydd / The Llywydd: Finally, question 8, Hefin David.

Civil Contingencies

Hefin David AC: 8. What action is the Welsh Government taking to plan for civil contingencies in Wales arising from a cyber attack against the UK by a foreign power? OQ60791

Mark Drakeford AC: Llywydd, the Welsh Government's cyber action plan focuses on enhancing cyber resilience and safeguarding our public services so they are able to prepare for, respond to and recover from cyber attacks and disruption.

Hefin David AC: Diolch, Prif Weinidog. If the COVID-19 pandemic taught us anything, it is to prepare for the unexpected, and I think if we'd asked those questions prior to the COVID pandemic, a global pandemic, I think some better preparation, some global preparation, might have been in place before that.
So, intelligence suggests that attacks from Russia- or possibly Chinese-based hackers has never been higher than now, and this poses significant risk, were it to be in the UK, for Welsh Government infrastructure; it could be the NHS, it could be the Development Bank of Wales, it could be any Welsh Government-run infrastructure. Therefore, would the First Minister be willing to present to us an outline of those preparations and discussions that have been had and will be had in order to prepare for such an eventuality that we hope will not happen?

Mark Drakeford AC: Well, Llywydd, a cyber attack I do not think now could be described as unexpected, because the scale of cyber attacks that we see on public infrastructure and in private companies mean that I believe any public service ought to be preparing for it, because this very much could mean you.
Now, right in the depths of the COVID experience, the Cabinet heard from Copeland council in England, a small district council. We were hearing from them in 2022. They had been the victims of a very significant cyber attack in 2017, and, five years later, Llywydd, they still had not recovered from it. It decimated all the major services that the council was able to provide, including some for very vulnerable people. It was a council with a budget of only £9 million and it was taking £2 million to recover from the attack. So, I think we were very alerted at that point to the need to do more here in Wales.
It's why, although cyber resilience is a reserved matter, not our own responsibility, we have established a cyber resilience unit. It works closely with the National Cyber Security Centre at Government Communications Headquarters and with the Cabinet Office, and our cyber action plan for Wales sets out the actions that public services in Wales need to take now to protect themselves from the risk of a cyber security attack. We're very fortunate in Wales that we have, in the south-east, including the Member's own constituency, the single largest cyber cluster in the whole of the United Kingdom. So, many firms, international firms, come to Wales to learn about how they can make themselves more resilient against such attacks. We have an indigenous capacity and expertise that we can put to work in this area, but Hefin David's warning of the seriousness of these risks posed to Wales, and the need for us across sectors to work to protect ourselves against them, is very timely indeed.

Y Llywydd / The Llywydd: I thank the First Minister.

2. Business Statement and Announcement

Y Llywydd / The Llywydd: The next item will be the business statement and announcement, and that statement is to be made by the Minister for Social Justice today. Jane Hutt.

Jane Hutt AC: Diolch yn fawr, Llywydd. There's one change to this week's business. Business Committee has agreed that questions to the Senedd Commission tomorrow should be reduced to 15 minutes. Draft business for the next three weeks is set out on the business statement and announcement, which can be found amongst the meeting papers available to Members electronically.

Darren Millar AC: Minister, can I call for an update on the Welsh Government's workplace recycling regulations? We all know that changes are afoot for business in the next few months, but I've been contacted by holiday parks and visitor attractions in my own constituency who've expressed concerns about the impact of the regulations on their businesses. We know that the requirements will mean that they are having to do some sorting of waste on site, and the existing recycling infrastructure that many of them have invested in will become redundant, with lots of investment required in new infrastructure. And as we all know, with those who turn up to visitor attractions and holiday parks, not all of them are able to monitor absolutely everything that's put into their waste receptacles. That means that many of them at the moment use contractors to sort their waste for them in order that they can achieve high recycling rates. I wonder what engagement the industry has had with the Minister, because I think it's been very limited so far, and whether there may be an opportunity to have some exemptions or alternative arrangements for those organisations that are doing their best to recycle, very sincerely, and are actually achieving very high recycling rates, but just via a different route than this requirement, which does seem overburdensome, for them to separate all of their waste on site.

Jane Hutt AC: Thank you very much for that question, Darren Millar. Indeed, it is really important that the recycling at workplaces moves forward, and there has been extensive engagement. I'm sure we all know from our own constituencies the engagement that's been taking place. And what a great step forward it will be. We're recognised already in terms of domestic recycling; we're the third best country in the world, and that's something I was able to share in my recent visit to Ireland last week for St David's Day. In fact, on 7 March—that's an important date in terms of engagement—there's a meeting being held with the industry.

Heledd Fychan AS: Minister, for many months, I've been asking for a statement from the Deputy Minister for Arts, Sport and Tourism on the safety of our national collections. We've heard a number of warnings from the National Library of Wales and Amgueddfa Cymru on the safety of our collections, not that they'll be stolen—they're perfectly safe in that regard—but because of the state of the buildings; we've heard of buckets having to be moved and staff having to go to the premises when it's raining heavily in the middle of the night. Clearly, these collections belong to the people of Wales, and it's important that we do secure their future for future generations. Last week, the Trefnydd confirmed that she would ask for a written statement. May I ask whether that's on its way? Is there a timetable for that, because the longer this goes on, the greater the concerns of staff?

Jane Hutt AC: Diolch yn fawr. And crucially important in terms of the safeguarding of our collections. I think this is important as we move to the final budget debate this afternoon, in terms of the way forward, particularly recognising, in terms of ways in which we can support this, that the safety of national collections is crucially important. And we are providing Amgueddfa Cymru and the national library with an increased capital budget, which is maintained in 2024-25, and actually—and this will be recognised, obviously, I'm sure, this afternoon—in this extremely challenging time, we continue to support our arm’s-length bodies to upgrade their estate and, most importantly for your question, protect the national collection.

Y Llywydd / The Llywydd: Natasha Asghar

Natasha Asghar AS: Thank you so much, Presiding Officer. Minister, I'd like to request a statement from the Deputy Minister of climate change regarding the much-needed station at the community of Caerleon. I recently attended the first meeting of TRACS, a very clever anagram they've created, which stands for 'Towards Restoring a Caerleon Station', at the community’s town hall, where the starting points for the campaign were discussed. This included the need from my suggestion of creating a very strong and passionate feasibility report. I could certainly see the huge benefits that a station would bring to the community as a vital transport link, connecting commuters to work, and increasing the use of public transport by making various nearby routes more efficient and worthwhile. This scheme also has cross-party support, with Ruth Jones, Member of Parliament, who also attended the meeting, giving the project her seal of approval as well.
I know the Welsh Government is aware of the need for this station due to your previous inclusion of the site within the south Wales metro plans, and I'm sure you can appreciate that the community has shown a lot of patience in waiting for this station. Minister, I completely understand that budgets are tight right now, but I would be very grateful if we could have an updated response from the Deputy Minister on the future of the station, and any help you may be able to give this community project group in order to make this project a reality would certainly be appreciated. Thank you.

The Deputy Presiding Officer (David Rees) took the Chair.

Jane Hutt AC: Thank you very much, Natasha Asghar, and the Deputy Minister for Climate Change, I know, will be aware of this campaign, TRACS, for this station in Caerleon, and the fact that it has already been acknowledged in terms of the south Wales metro plan. So, indeed, challenging economic times, but I'm sure that will be noted today in terms of progress.

Mark Isherwood AC: I call for two Welsh Government statements, by the relevant Ministers, in this Chamber. The first, an update on proposals for improved connections across the Menai strait. Following the publication of the North Wales Transport Commission's December 2023 report, 'Improving the Resilience of Connections Across the Menai Strait', and the Isle of Anglesey County Council executive's subsequent consideration of this last week, the councillors concluded that the commission’s findings are inadequate to resolve the lack of resilience deemed to exist in respect of the current Menai crossings. They therefore propose that the Welsh Government rejects its conclusions and recommendations and adopts a policy position that a third Menai crossing is essential to safeguard the medium to long-term social and economic future of Anglesey and the mainland, in accordance with the Well-being of Future Generations (Wales) Act 2015.
I also call for a Welsh Government statement on its tourism policies. Tourism brings the equivalent of one seventh of the Welsh Government's annual budget, down from one sixth pre pandemic, and is responsible for 5 per cent of our gross value added. It supports between 180,000 and 206,000 jobs throughout Wales, notably in areas where alternative jobs are not easily come by. The industry has been dealing with a flood of Welsh Government policy changes in the last two years. Thousands of small businesses, key to their local economies, are being overwhelmed by the number of new regulations and costs, and tourism industry representatives have emphasised the importance of understanding that tourism is an ecosystem as well as an industry, and that if you target one sector, the effects ripple out beyond the immediate focus and affect other businesses. They're therefore calling on the Welsh Government for a review of the cumulative effects of policies currently affecting tourism, including business rate relief, the 182-day rule, council tax premiums, and proposed policies such as statutory licensing, tourism tax, and changes to the school year.
I call for two Welsh Government oral statements accordingly.

Jane Hutt AC: Thank you, Mark Isherwood, and your question about the Menai crossings, of course, we're committed to improving the resilience of the Menai crossings and agree with the view that access to and from the mainland is about more than transport. We understand the commission had discussions with the north Wales emergency services about the impact of disruption and closures on their ability to deliver essential services effectively. And, of course, issues arising from accidents and weather events and how to alleviate impact are key issues for the commission in making its recommendations, and, of course, as they have moved forward, to set out a series of improvements that could be made and monitored before consideration of a third crossing. So, they're procuring, shortly, detailed feasibility work on a number of these recommendations, in terms of the Menai crossings.
Your second point is important, and I think we can be proud of the Deputy Minister, certainly, in terms of taking this forward with our great vision for tourism, and delivery of tourism in Wales, which is clear about the opportunities and the prospects, but also the figures speak for themselves in terms of the attraction of Wales. I think it is important, as the First Minister has just mentioned, the importance of the visitor levy, which we believe will make a beneficial difference in terms of tourism in Wales.

Y Dirprwy Lywydd / The Deputy Presiding Officer: Finally, James Evans.

James Evans AS: Diolch, Deputy Presiding Officer, and thank you very much for allowing me to sit down; I didn't really want to fall over.
Minister, I would like to add my weight to Darren Millar asking for a statement on the new waste recycling rules. I've been inundated by constituents who own businesses, big and small, in tears with these new rules, and also town and community councils saying that they're going to have their towns turned into bin towns, with 25 bins for every five that are currently on the street. It is going to litter our towns; it is going to make businesses struggle with the additional cost of having these bins, so if we could have an urgent statement from the Welsh Government, I think it would go some way to alleviate some of the fears that the industry have, and also how the Welsh Government tend to counter some of these arguments here and what they're going to put in place to make sure that our towns aren't going to become bin havens all over the place. Diolch.

Jane Hutt AC: Well, as I said earlier in response to the question from Darren Millar, extensive engagement has been taking place, but also there is a meeting on 7 March that the Minister for Climate Change is holding with the industry.FootnoteLink I do think this is something where, again, this will be a great change to move forward Wales, won't it, in terms of our commitment to our environment, and the track record that we've got, the track record that—. And I think it goes back to the point the First Minister said about local authorities and local government and the way in which they are working together with businesses in their communities to ensure that workplace recycling is embraced and implemented, and understanding the transition that that will take, and the Minister will be addressing that with the industry this week.

Correspondence from the Minister for Social Justice and Chief Whip

Y Dirprwy Lywydd / The Deputy Presiding Officer: I thank the Minister.

3. Debate: Welsh Rates of Income Tax 2024-25

Y Dirprwy Lywydd / The Deputy Presiding Officer: Item 3 today is the debate on the Welsh rates of income tax for 2024-25. I call on the Minister for Finance and Local Government to move the motion. Rebecca Evans.

Motion NDM8501 Lesley Griffiths
To propose that the Senedd, in accordance with section 116D of the Government of Wales Act 2006, agrees the Welsh rate resolution for the 2024-25 Welsh rates of income tax as follows:
a) the Welsh rate for the purpose of calculating the basic rate of income tax is 10p in the pound;
b) the Welsh rate for the purpose of calculating the higher rate of income tax is 10p in the pound; and
c) the Welsh rate for the purpose of calculating the additional rate of income tax is 10p in the pound.

Motion moved.

Rebecca Evans AC: Thank you for the opportunity to open this debate on the Welsh rates of income tax resolution for 2024-25. Welsh rates of income tax were introduced in April 2019, and apply to the non-savings and non-dividend element of income earned by Welsh residents. Welsh rates of income tax are estimated to raise over £3 billion in the next financial year, supporting our public services through the Welsh Government budget. The proposed Welsh rates for the next financial year were announced in the draft budget in December. This rate resolution, if agreed, will mean that Welsh taxpayers will continue to pay the same income tax as their England and Northern Irish counterparts.
Our approach to setting income tax rates is set squarely within the context in which we operate as a fiscally responsible Government. We face continued and considerable pressure on our public services due to persistently high levels of inflation, and people in Wales are challenged every day with the cost of living. Our income tax base is relatively weak, which means any significant change to our resources through income tax rises would require an increase to the basic rate, all while people continue to struggle to pay their bills. I do not believe that now is the right time to increase the overall tax burden in Wales.
It's important to recognise that the UK Government's decision to freeze income tax thresholds means more of our lowest earners have now been dragged into the income tax system. Increasing rates now would add an additional tax burden on those least able to afford it, and at a time when the overall level of taxation is at its highest level for many years.
The context we have faced during this budget process has been the hardest we've faced since devolution. Even after the additional funding I've been able to allocate in the final budget, the impact of inflation and the UK Government's refusal to increase public spending means our settlement is worth up to £1.2 billion less in real terms than when it was set in 2021. We were faced with a series of stark and painful choices because our funding settlement is simply not sufficient to respond to all the pressures that public services, businesses, individuals and all of those organisations that rely on Welsh Government funding are facing.
Our budget proposals for 2024-25 have been designed to protect the core services that we all rely on as far as possible. We have a responsibility to deliver a budget that's fully costed and balances spending needs with the financial pressures people in Wales are already facing, and retaining Welsh rates of income tax for each band at 10p in £1 allows us to do that. Based on the latest Office for Budget Responsibility's forecasts, setting WRIT at 10p for all bands is expected to raise £3.171 billion in 2024-25. Together with the funding received through the block grant, Welsh income tax contributions are a vital part of the budget, and I ask that Members support the motion today so that we can continue to support public services in Wales at this very challenging time. The motion also ensures that we protect our core services and delivers on our programme for government commitment not to increase Welsh rates of income tax.
Looking further ahead, we'll be guided by our tax principles that commit us to designing clear and stable taxes that deliver our progressive agenda. Those with the broadest shoulders should pay a greater share. Ensuring that we make the most of our devolved tax responsibilities also means working closely with HMRC on the administration of WRIT. As highlighted in the National Audit Office's most recent report, the robust processes and governance arrangements with HMRC provide a strong basis for the effective and efficient collection and administration of WRIT, going forward. I look forward to the debate today.

Peredur Owen Griffiths AS: As we've mentioned many times before, the inability of the Senedd to set its own tax bands, in contrast to the powers enjoyed by the Scottish Government, means that, in practical terms, the Welsh rate of income tax is inherently limited as a fiscal lever. While we understand the rationale for not adjusting the Welsh rates of income tax for the sixth consecutive year, once again we are forced to reflect on what might have been if we had the powers to create an income tax framework actually tailored to the nature of our tax base. I would urge the Government, therefore, to redouble its efforts in laying the groundwork for the Senedd to be in a position to utilise these powers as soon as possible.
Scotland has shown the way with their progressive approach to income tax; there's no reason why we can't do the same. And, of course, given the expectation that tomorrow's UK spring budget will be accompanied by tax cuts, the need to instil greater flexibility in our own fiscal framework has never been greater. If the personal allowance threshold remains frozen, as expected, the Resolution Foundation has estimated that the planned cuts to the basic rate will effectively result in a transfer of wealth from anyone earning below £38,000 per annum. As is standard for most Tory policies, this would entrench already stark income inequalities. A number of leading economists have also warned that funding these tax cuts will inevitably result in yet another bout of austerity being imposed on the UK's ailing economy. As we've seen in recent years, this can have a devastating impact on public finances. I'd be grateful, therefore, if the Minister could explain how the Welsh Government will be engaging with the UK Government on the potential impact of the spring budget on Wales's block grant over the coming years. Diolch yn fawr.

Mike Hedges AC: I support the Welsh Government's decision not to change the 10p income tax rate, keeping us in line with England. The amount of money people can earn in Wales before they start paying tax is the same as it is in the rest of the UK. There are three tax bands: the basic at 20 per cent, the higher at 40 per cent, and the additional at 45 per cent. Along with personal allowances, these are set by the UK Government. There is no power to alter these bands, as Peredur raised and I hope to mention more in a few seconds. Because the band limits are frozen, more people are moving into higher bands and into taxation as wages increase. This would be a different debate if we had the power to set the bands—an entirely different debate—and, hopefully, the Minister would come forward with entirely different proposals. So, the options are either to increase the rate at each band, decrease the rate or keep it the same. Increasing the basic rate by 1p would bring in between £250 million and £300 million, the equivalent of one health board's overspend. It would also be very unpopular with the people wondering why they were paying more than in England. Decreasing it by 1p would reduce the Welsh Government's income, and we know budgets are stretched already. While superficially increasing the additional rate from 45 per cent to 50 per cent appears attractive, or even very attractive, there are only 500 of these taxpayers in Wales. Additional rate taxpayers are the people most able to move to dividend income and register a property in England as their main home. If 11 per cent of them do either of those, then the increase is wiped out. That is 55 people making that decision. This is why Scotland, and Labour and the SNP, did not use their power to change rates by up to 5 per cent. What would I like to see happen? Welsh Government control over tax bands, and dividend income devolved and then treated the same as other income for tax purposes. This is the biggest means of avoiding taxation that exists. The Treasury and the Welsh Government are losing billions of pounds by people being paid in dividends rather than being paid, as they should be, in income. Because dividend taxation is much lower, you can save lots of money. But, without those changes, I support keeping the rate the same as England. It's what we're going to have to do every year until we have one or both of those changes.

Y Dirprwy Lywydd / The Deputy Presiding Officer: I call on the Minister to reply to the debate.

Rebecca Evans AC: I'm grateful to both colleagues for their contributions to the debate today. As we move further into the Senedd term, we will obviously keep under review the vital role that WRIT plays as a partially devolved tax in Wales, although, as Mike Hedges says, we haven't diverged from the rate at which tax is set across the border. Yet, it is is an active choice that we make every year. And any changes that we do make to devolved taxes do need to be carefully examined and considered in the context of our overall budget requirements.
The way in which income tax is devolved to Wales does reduce the risks associated with the different income distribution in Wales, as compared to England and Northern Ireland, and the fact that only 10p in each band is devolved to Wales does mean that any changes to the tax rates made by the UK Government cannot create a difference between tax rates faced by taxpayers in Wales and those across the border in England, and that's not the case in Scotland. It's really worth bearing in mind that, over the years for which outturn is available, WRIT has added more per person to the Welsh Government budget in net terms than Scottish income tax has added to the Scottish Government's budget over the same period. I know that the Scottish Government has made some different choices this year because they have more options available to them. But, as Mike Hedges has set out, if we were to increase tax at the very top end here in Wales, it would bring in only an additional £5 million, and we are very aware of behavioural impacts that might take place as well.
But it's also worth bearing in mind that the Scottish Fiscal Commission has estimated that the behavioural effects reduce the potential income from the tax changes announced by the Scottish Government by £118 million. So, that's even more relevant for us where we have a larger proportion of our population living along the border and able to make those choices that Mike Hedges has described as well. So, I think it's absolutely an important and interesting debate that we should be having, but I don't think the case is yet made for that.
And then, just to confirm that the UK Government, as we know, presents its spring budget tomorrow and it is my intention to make a statement as early as possible following that to provide colleagues in the Senedd with an update on forecasts and also the detail of any implications for Wales. And just to say that it's no secret that the Chancellor is considering tax cuts and we, along with everybody else, await the outcome of those considerations. But, just to be clear, if the UK Government decides to change income tax rates, there's no impact on the block grant adjustment, and any changes the Chancellor makes will apply to taxpayers here in Wales. But, as I say, we await the outcomes of those decisions tomorrow, and I will update the Senedd as soon as possible after that.

Y Dirprwy Lywydd / The Deputy Presiding Officer: The proposal is to agree the motion. Does any Member object? No. The motion is therefore agreed in accordance with Standing Order 12.36.

Motion agreed in accordance with Standing Order 12.36.

4. Debate: The Final Budget 2024-25

Y Dirprwy Lywydd / The Deputy Presiding Officer: Item 4 today is the debate on the final budget for 2024-25, and I call on the Minister for Finance and Local Government to move the motion—Rebecca Evans.

Motion NDM8499 Lesley Griffiths
To propose that the Senedd, in accordance with Standing Order 20.25, approves the annual budget for the financial year 2024-25 laid in the Table Office by the First Minister on 27 February 2024.

Motion moved.

Rebecca Evans AC: I'm pleased to open the debate on our 2024-25 final budget, the last in our three-year budget-setting process, which we started back in 2020-21. As I outlined when publishing our draft budget, this has undoubtedly been the toughest budget that we've had to date. We've been presented with the most difficult choices, and we've had to focus on the areas that should be protected in line with those services that matter most to the people of Wales.
We knew back in 2020-21 that the third year of the spending review period was going to be far from easy to manage, with a short-sighted settlement from the UK Government front-loading a constantly diminishing allocation to Wales. So, that left us with limited choices, but we took this opportunity to ensure that, here in Wales, we listened to what people told us they wanted: more support for the NHS, protection for the services that local government delivers, and limiting job losses wherever possible. We've provided for that in the draft budget and we are reinforcing it in the final budget.
Typically, we don't make many changes between draft and final budget. Sometimes we make technical changes or we make changes to reflect the issues raised in scrutiny. But, this time, we’re making more changes than usual, because, in the last couple of weeks, the UK Government has finally given us further details about the funding consequentials we will receive as a result of decisions it has made to increase spending in devolved areas in England in this financial year. Including the financial transactions capital allocations that I had planned to make at final budget, it means that we can make almost £190 million of extra allocations in the final budget. It also means that I can provide for a very modest in-year reserve that will provide more scope to respond to urgent issues as they arise next year.

Rebecca Evans AC: In making new allocations in the final budget, we've listened to the key messages coming through in the scrutiny process. The additional allocations we are making are focused on those areas where pressures are most severe or where reductions would not have been made in the draft budget had we been aware of the intended consequentials. There will be £14.4 million extra for local government to help it meet pressures in social care and schools. We're reversing the cuts made to both the social care workforce grant and the children and communities grant of £10.5 million and £5 million respectively. I have previously notified the Senedd of this so that local government had the certainty that it needed in order to plan. The additional funding for local government means that no council will have less than a 2.3 per cent uplift in their settlement.
An extra £10 million will be made available to strengthen apprenticeship and employability programmes, making sure that we're ready to support steelworkers if Tata closes the blast furnaces at Port Talbot. I've provided £5 million revenue to support homelessness prevention activities, and £5 million capital for the social housing grant. There is £40 million of new capital funding to support the NHS, and the final budget confirms the £30 million funding package for the Holyhead breakwater, and a new £20 million fund to help small and medium-sized businesses futureproof their businesses.
We're also making some additional allocations to our shared co-operation agreement priorities, including constitutional reform work and housing projects. I want to thank Siân Gwenllian, the designated Member for the co-operation agreement, for the constructive relationship we’ve had during what has been a difficult budget round. Of course, this budget would not have been possible without the participation and co-operation of colleagues within my own party. I’d also like to thank Jane Dodds for our constructive discussions and recognise it's in this spirit of collaboration that I present the plans that we’re voting on today.
Turning to scrutiny, I want to thank all Members for their constructive engagement through our scrutiny process. As I committed, I and my Cabinet colleagues have responded formally to recommendations of all Senedd committee reports in advance of today's vote. We’re pleased to be able to agree with the vast majority of our respective committees' recommendations. As we have collectively recognised, the context in which we're delivering this budget has meant that we've not been able to respond to all of the areas that have been identified. Reflecting on the points raised in scrutiny, many of the issues identified, as in previous years, link to the fact that we have seen significant changes to our budget very late in the financial year. We were left with less than four weeks in which to undertake our budget preparations, also impacting on this Senedd's scrutiny timetable. While we were able to still produce our budget documentation in this challenging timescale, the reality is that this makes it difficult for us to plan properly, with knock-on consequences for other public sector organisations. We also face rigid limits on our ability to carry forward or draw down funds from reserves, which hampers our ability to plan ahead and respond to changing circumstances. Further, the full detail of consequential funding from the UK Government has come very late in the financial year. Such late notification has resulted in us being forced to make choices in our draft budget that could have been averted if we'd received this information at the same time as Whitehall departments. There is something fundamentally wrong with a UK funding arrangement that allows this to happen.
I'm grateful for the cross-party support for increased budget flexibilities to enable us to manage our funding more effectively in line with Wales's needs. I'll also take this opportunity, as I start to close my remarks, to put on record my thanks to our Welsh Government officials, who have again approached this budget with professionalism, creativity and commitment, and I'm very, very grateful to them for their first-class work.
In closing, despite the challenges that we face, I am confident that this budget continues to maximise our available funding. However, with the UK spring statement due tomorrow, we can expect further changes to our settlement. I'm confident the package I have set out today enables us to be in a good position to respond to those changes.
And finally, I'll end by reiterating what I set out at the draft budget: that this budget maintains our commitment to prioritise people and support the public services that they rely on. I look forward to the debate.

Y Dirprwy Lywydd / The Deputy Presiding Officer: I call on the Chair of the Finance Committee, Peredur Owen Griffiths.

Peredur Owen Griffiths AS: Diolch, Dirprwy Lywydd. I am pleased to contribute to this debate on the Welsh Government’s final budget. The committee’s report on the draft budget included 39 recommendations, and I am pleased that the Minister has been able to accept the majority of them. That said, I would like to begin by expressing my disappointment that limited changes have been made between the draft and final budget. Our committee, as well as a number of others, made concrete recommendations in key strategic areas, which could have strengthened the budget we have before us today.

Peredur Owen Griffiths AS: However, before I reflect on the Minister’s response to our report, I'd like to address some general points. Firstly, I want to express our sympathy with the Welsh Government’s position. As the Minister has mentioned, it's highly regrettable that we are voting on a final budget today, a day before a major fiscal event at Westminster. We have long called for the Treasury to treat the Senedd with respect when it comes to the timing of its fiscal events, and it's clear that this issue persists.
Secondly, the Minister has indicated in her response that the appropriate portfolio Ministers will respond to a number of our recommendations. This seems a novel approach, as normally it is the Minister who provides this information on behalf of ministerial colleagues. I would like to ask the Minister, therefore, to clarify the reason for this, and confirm whether we will receive additional responses from individual Ministers to that already provided.
Thirdly, we noticed during our recent consideration of the second supplementary budget that the maximum amount of funding has been drawn down from the Wales reserve. However, further allocations are made from the reserve in this final budget, which struck us as odd given that they may no longer be available. This seems unusual, and is something we will explore further with the Minister in the coming months. But if she's able to clarify anything today, then that would be great.
I’ll turn now to our specific recommendations and responses to them. We called for the Minister to provide assurances that funding levels within the budget are sufficient to protect front-line services. Whilst we are pleased that the Minister has accepted our recommendations on this point, we remain concerned about the lack of information provided to measure overall expenditure against desired outcomes. In particular, we are still in the dark as to the justification behind the decision to increase NHS funding without a proportionate increase for social care, given the interdependencies that exist between them.
At the draft budget stage, the Welsh Government was not in a position to make full financial transaction capital allocations. Despite assurances that this would not become precedent—and while we understand the difficulties of the timing around UK fiscal announcements—we find this disappointing and press again for these to be published sooner so they can be scrutinised at an earlier stage. 
On prevention, the committee criticised the lack of evidence used by the Welsh Government to demonstrate how short-term decisions around prioritisation are balanced by strategic long-term objectives. We are pleased that the Minister has accepted our recommendations in principle. However, I would reiterate our call for the Welsh Government to assess the impact of diverting funding away from services that are considered preventative in nature to support front-line services.
We heard several times during scrutiny that the cost-of-living crisis has not gone away and about the need to protect the most vulnerable in society. We urge the Welsh Government to keep a watchful eye on how the impacts of its decisions play out and how they will be measured. We look forward to hearing more on this as the Minister reviews the budget’s strategic integrated impact assessments.

Peredur Owen Griffiths AS: Dirprwy Lywydd, I would like to finish my contribution by looking ahead to the future. Scrutiny is fundamental to identify key areas in the Welsh Government’s budgetary plans that require improvement. I will shortly be writing to Senedd committees—as I have done in previous years—on the evidence provided by the Welsh Government, and to explore ways of maximising budgetary scrutiny throughout the year. I would like to thank the Minister for her openness in discussing these issues, as well as our ongoing dialogue to improve the Senedd’s budgetary processes in order to reflect current practice. We hope that they will be embedded in the budget protocol, going forward. Before concluding, I'd like to thank the Finance Committee research and clerking team, and my fellow Members on the Finance Committee, for their work on the budget. Thank you very much.

Peter Fox AS: I want to begin by thanking all of the committee's stakeholders and members who have contributed to the scrutiny of this budget. It's only through effective scrutiny that good governance and policy making can occur, and I'm pleased to see that the Welsh Government has listened to elements of that budget scrutiny, and has implemented some changes. I particularly welcome the additional funding that has been provided to our health and social care service, particularly the reversal of cuts to the social care workforce fund for local authorities, who are faced with ever-increasing pressure on their sector, and who are expected to deliver a lot more with a lot less, recognising the huge, real-terms cut levelled on them.
However, this budget fails to address many of the very real issues that families and businesses are facing. The Welsh Government's continuous blaming of everyone else except themselves for their poor record is holding the country back. The simple truth is that we as a country cannot hope to move forward until we see a Government that is willing to accept responsibility for the results of its policy making. Our Welsh NHS is a case in point. After this budget, it will still be under mounting pressure, which it is not prepared for, as a direct result of decades of underfunding by successive Labour Governments here.
As I've said before, if money had been spent where it should have been, our waiting lists would not have been as long, our health boards not bending under significant financial pressures, and people wouldn't have to be waiting on the longest waiting lists in the UK. This budget is a missed opportunity to address the systemic issues in our health system, and to help with the huge pressures that the workforce is under, where we see issues from excessive spending on agency staff to a lack of investment in primary care. We need to see strategic and long-term thinking that can rebuild and strengthen our healthcare system here in Wales.
This Labour Government has also missed an opportunity to help change the fortunes of our education system, which, as we know, is performing way below where it needs to be. It's also failed to recognise the importance of the economy, choosing not to provide sufficient business rate support for businesses in the hospitality, retail and leisure sectors, leading to businesses in Wales paying far more in business rates than their counterparts in England. Furthermore, the Welsh Government will not support parents of young children in Wales to the levels that are offered in England, where parents of children as young as nine months will begin to receive free childcare, whereas parents here will have to wait until their child is three years old. This is despite the Government having received £180 million to offer the same in Wales. [Interruption.] This huge disparity for parents—

Y Dirprwy Lywydd / The Deputy Presiding Officer: Can I ask Members to have conversations outside of the Chamber, please, so I can hear the Member speaking?

Peter Fox AS: This huge disparity for parents in Wales will disadvantage women, whose careers are being held back due to the lack of affordable childcare—again, affecting our economy. It's also disappointing that the harsh cuts to the rural affairs budget are still in place, meaning that rural communities and the rural economy will continue to be held back. Whilst Plaid Cymru were very vocal against the Government last week in relation to rural policies, the simple fact is that this budget today, and these cuts, will be voted through by Plaid Cymru Members, and, no doubt, our Liberal colleague. [Interruption.] Yes, certainly.

Llyr Gruffydd AC: I find it interesting, after all that was said and done last week, that it seems now that the Conservatives in Wales are going to be voting against a budget that secures the total quantity of the basic payment to the front line of Welsh farmers next year. Are you really standing up and telling us that you're going to oppose that? Because we've heard before how that generates an extra £9 return on investment. So, it's effectively taking away £2 billion from the Welsh economy.

Peter Fox AS: No. That's a deflection from Plaid Cymru, to take away from the fact that you've propped this Labour Government and its budgets up for years and years.
Sadly, this budget fails to properly address the people's priorities. It lacks the sound, strategic forward planning that we need at many levels in Wales to not only address the people's well-being, but to grow the economy, raise aspiration and create opportunities for Welsh citizens. Once again, I fear Wales will be subject to another year of knee-jerk decision making and a Government that will continue to be obsessively focused on pet projects, rather than prioritising the people of Wales. For all of the reasons I have stated, the Welsh Conservatives will oppose the budget. Diolch.

Rhun ap Iorwerth AC: The picture before us is bleak and all too familiar, dictated, to a large extent, of course, by the austerity-driven UK Conservative Government. There's clear cross-party consensus in the Senedd that the current fiscal framework for Wales is simply not fit for purpose. In this general election year, of course, anything other than a clear commitment from any would-be Prime Minister to address that will further entrench the London parties' complicity in depriving Wales of what is rightfully ours. A funding formula that leaves us short-changed year on year, that has denied us billions of pounds in HS2 consequentials, and that ties us too closely to suspect agendas, shall we say, at Westminster puts the political handbrake on what should be our collective mission, that of building a fairer, more ambitious nation.
My sympathy for the Welsh Government is real, and yet it is also qualified. Operating within the fiscal straitjacket imposed upon it not only limits the money at Ministers' disposal, but also their spending flexibility. But what it doesn't do is blunt Labour Ministers' ability to secure a firm commitment that Wales will be funded fairly should there be a UK Labour Government. The silence on that is still deafening. Secondly, it hasn't curtailed the Government's ability to better plan ahead. And, thirdly, it can't absolve Welsh Government of its responsibility for the spending decisions it makes and the priorities it sets.
I want to focus on the sheer unsustainability of the Welsh budget as it stands. With over 50 per cent of the entire Welsh budget committed to health and care, NHS finances are on an utterly unsustainable trajectory. The £425 million in additional funding for front-line services will barely scratch the surface in addressing deep-rooted and systemic issues in our healthcare sector. The shift of money away from so many preventative programmes is another worry. We're just entrenching that vicious circle that we are in. We all want to see a well-resourced NHS equipped for the twenty-first century, but crucially, spending is increasing with no discernable evidence that outcomes are getting better, and that has to change. The blame lies squarely at the feet of Labour Ministers.
Another winner is Transport for Wales. Since October, Transport for Wales has received around £235 million in additional funding, which equates to almost the entirety of the £245 million in revenue cuts that are being spread out across almost every other policy area as part of this budget. Remember that Transport for Wales has some of the worst rates for punctuality, cancellations and customer satisfaction of all major UK rail operators. But while rail services are consuming vast sums of money, bus services are being starved of funding. This means that the many communities of Wales that do not have access to rail risk becoming even more disconnected. [Interruption.] Again, this demonstrates a lack of joined-up thinking. From a sedentary position, the soon-to-be outgoing Minister for transport says, 'What would you do?' What we need to see and what we fail to see from the Welsh Government under Labour is building sustainability within transport, and it's the plan to build that sustainability that we are lacking. We can look at budget, we can look at policy development.
As with health, we can see the lack of joined-up thinking in the big hit to the apprenticeship budget too, exacerbating the long-standing skills gap in the Welsh workforce. In fact, the spending plans outlined in this budget promise the same old story for the Welsh economy: wasted potential, stagnant growth and managed decline. Plaid Cymru firmly believes that supporting our small and medium-sized enterprise sector is essential towards creating a more dynamic and prosperous Welsh economy. It's regrettable that the decision to slash business rates relief will pile on the pressure for a sector that continues to feel the pinch of high energy prices and the aftershocks of the pandemic.

Rhun ap Iorwerth AC: There are aspects within the budget that are to be welcomed and that reflect the mature cross-party politics that is an integral part of devolution. The budget confirms the co-operation agreement commitment between us and the Government to enhance free school meals and to expand free childcare to two-year-olds. As we heard from Llyr Gruffydd, despite the widespread frustration within the agricultural sector, frustration that we on this side of the Chamber share, the assurances provided by safeguarding the basic payments is an important step, and one opposed by the Conservatives in voting against this budget today.
Now, to close, Dirprwy Lywydd, it's clear that passing a budget and having a stable Government go hand in hand. And we on these benches have carefully scrutinised this Labour budget. Through the scrutiny process, my fellow Members have highlighted various elements. Some of our demands have led to changes, and I'm grateful to the Government for that. But this is a Labour budget, one for the Labour Government to justify and implement within the settlement received. And most importantly, today has to be a turning point, a recognition that we will be back in the same position year on year, unless there is a change of attitude from the UK Government and a real commitment to fair funding for Wales.

Mike Hedges AC: For former MPs and former councillors, treating the budget as an ordinary debate must seem extraordinary. One hour to discuss the final Welsh budget for next year. I have attended council budget meetings significantly longer than this. Today the budget is not even the major item on the agenda, it is overshadowed by Senedd reform. I am disappointed that neither the Conservatives nor Plaid Cymru have produced an alternative budget. We do not need a line-by-line analysis, but a decision on relative priorities. The supplementary budget has explained that. The opposition party is exceedingly good at finding areas to spend money on or to reduce income, but less good on areas of saved revenue expenditure.

Gareth Davies AS: Will you take an intervention, Mike?

Mike Hedges AC: Please.

Gareth Davies AS: On that point, would you accept that it would be more achievable to produce an alternative budget if we were privy to the same information that the Government are? Currently, we're not.

Mike Hedges AC: No, and I'm going to explain why later.
So far, the Conservatives have only suggested a saving of £1 million on Senedd reform next year. They have also suggested that Cardiff Airport is sold, which would raise a considerable sum of money if sold for housing. It is unsalable as an airport without a substantial and ongoing dowry. We either wish to have an airport in Wales or we do not. The Conservatives will vote against the budget. What happens if we do not agree a budget? One of two things: the current budget rolls forward, or the Secretary of State sets the budget, as happened this year in Northern Ireland when the Secretary of State for Northern Ireland announced a 2023-24 budget for Northern Ireland.
Looking at the economic forecast, we see slow growth in the UK economy, we see inflation expected to fall but still remain high. An inflation fall is totally dependent on commodity prices. Inflation is being driven by commodity prices—anybody who puts petrol in their car will be aware of that. Despite real-terms wage growth expected in 2024-25, household income, disposable income, is expected to fall, a key factor being that boosts to saving income are outweighed by rising interest payments. Ask anyone paying a mortgage how they are being affected.
Wales is underfunded by about £1.3 billion. Northern Ireland is treated differently. The UK Government has set aside £600 million to settle a public sector pay claim as part of a £3.3 billion financial package to support the return of devolution in Northern Ireland. This, as far as I can see, is outside the Barnett formula. What the Barnett formula sets is the minimum allocation under the formula to be provided, but you can provide more. It's not the first time Northern Ireland has had substantially more. I think that is something that we need to perhaps take up with whoever is the next Prime Minister, that the Barnett formula sets a minimum. We're not going to revise the Barnett formula in the next 12 months. But it only sets the minimum, more above that can be provided. Has it ever been done before? Yes, when Wales got the funding of Crossrail.
I would suggest some areas of cuts. End education consortiums and use the money saved to fund the pressures being faced in school budgets. Cap basic farm payouts, which is the policy of the Farmers Union of Wales. Do not financially support businesses setting up or expanding in Wales paying less than the median wage. Do not support businesses that—if they're paying less than the median wage, they're driving the median wage down. Do we really want to bring people in here to pay our people less? End Help to Buy. We know in England that the Help to Buy equity loan scheme closed to new applicants, with the scheme officially ending early last year. The only effect of Help to Buy is to put money into the housing demand side, thus increasing house prices.The Finance Committee was told that the Transport for Wales subsidy is now between £13 and £14 per passenger. Does the Government intend to reduce it? How much do Transport for Wales spend on taxis when trains are not running? I understand from some getting-wealthy constituents that they spend an awful lot sending people from Swansea to Llanwrtyd Wells by taxi.Review enterprise zones and decide if they are value for money, and end those that are not, because my experience of enterprise zones is that what they actually do is relocate people from fairly close.
Commenting on the pressures facing the NHS, the Institute for Fiscal Studies stated there's still an underlying productivity issue in the NHS. Why not set targets for a number of operations, e.g. hip replacements, in each health board, which are easily measurable, rather than waiting times, which are difficult to control? The number of operations is controllable. I support preventative measures, and commend Designed to Smile and theeffect of reducing tooth decay in children, but we need more preventative spend.
Finally, can I stress the importance of both local government and culture, especially the national library and the national museum, and the importance that they are adequately funded as well? We have too many areas in Wales that are untouchable, and too many other areas where cuts have to be made. Perhaps we need to look more at the untouchables.

Gareth Davies AS: I'd like to tailor my contribution today to an issue of considerable importance in my constituency, namely the tremendous anxiety being felt by parents and school leaders in Denbighshire due to the planned cash-terms cuts to education, outlined in this budget. I received a letter last week from school leaders across the county warning of extreme cuts that they are being forced to make. This will mean that children in Denbighshire will lose their pastoral care, well-being support, behaviour support, mental health support, learning support and access to extracurricular activities. The National Association of Head Teachers Cymru have said that 90 per cent of schools in Wales will have to make cuts, and, as a remark that the leader of Plaid Cymru made, this lies squarely with the Welsh Labour Government.
The latest Welsh Government budget sees a £56 million cash-terms cut to education, announced, incidentally, after the most recent Programme for International Student Assessment results revealed that Wales achieved its worst score since we started participating back in 2006. Universal free school meals, however, maintained a £22.5 million increase in the 2023-24 budget, meaning that the taxpayer is subsidising middle class and affluent families who don't need help necessarily, whilst children with additional learning needs and some of the most vulnerable and disadvantaged children are potentially seeing their learning support withdrawn. This looks like a Government putting ideology before reality, sadly.
It's been repeated many times in this Chamber how the Barnett formula provides a disproportionately higher amount of funding for health and education in Wales, but the money is going elsewhere, to the ideologically driven vanity schemes, like the expansion of the Senedd, which we're debating later today, to accommodate 36 more politicians without a referendum, which will set the taxpayer back by £120 million. [Interruption.] Yes, Mike.

Mike Hedges AC: Vanity schemes—would you like to add them all up, because, so far, you've mentioned one, which is going to cost £1 million next year?

Gareth Davies AS: So, over the next five years, it will cost £120 million, and add another one into there, if you want, Mike—it's the blanket 20 mph policy, which is costing an additional £36 million. So, if, by my sums—I'm no great mathematician—but £120 million plus £36 million equates to about £156 million. And if that was prioritised in our health, education, social care and issues that relate to people's everyday lives, then I'm sure that would be gratefully received, a lot more than 36 more politicians in this place, which suits to serve Labour's ideology and Plaid's endless pursuit of Welsh independence. [Interruption.] That's not a welcoming remark, by the way.
I would be grateful, while responding to this debate, if the Minister could address—. It's nice to see the real ideology behind it all, isn't it? Finally, we get some truth. It's nice to see sometimes. Seriously though, I'd be grateful, when responding to this debate, if the Minister could address the concerns of parents in Denbighshire, particularly parents of children requiring additional support. What is your Government going to do to ensure that these schools do not make the extreme cuts that will place Welsh pupils at a further disadvantage to my constituents in the Vale of Clwyd? Thank you.

Jane Dodds AS: May I first start by thanking the Minister and her team for liaising and working with me in their engagement? Thank you very much. I wish to acknowledge and welcome the changes the Welsh Government has made to this final budget, following extensive debate in this Siambr and the extra funding we have received from the UKGovernment. I recognise that there are many issues that are raised and brought forward, and I just wish to concentrate on a few, if that's all right.
I'd like to welcome the restoration of the £5 million for the children and communities grant, which aims to support the most vulnerable children and adults. Thank you for the restoration of that. Of course, any additional funding that enhances opportunities for children in the most deprived areas is very welcome.
Additionally, I welcome the £5.3 million for apprenticeships, which has already been referred to. We really do need to look at the opportunities to enhance and increase our spend on apprenticeships, particularly looking at the opportunities for us to employ those in our green industries. So, I continue to encourage the Welsh Government to do more to build the skills-led net-zero economy that we need for our future development.
It is evident that, even with the announced increases in sector budgets, we are attempting to stretch limited resources far too thinly. If I may use this analogy, it's like spreading a miniscule amount of butter over a large expanse of bread—or toast, perhaps, if that's your preference. Even with the additional money for childcare and apprenticeships, it still falls woefully short of what is truly required to fully support our vital programmes.
It remains appalling that adequate funding for our essential services relies so heavily on the outdated Barnett formula, which we've just heard about, and that arrives far too late in the financial year, which does stymie proper planning. With the final UK budget due tomorrow, last-minute decisions and surprise policies from the UK Conservative Government could still, as I understand it, impact the Welsh budget, further undermining our financial stability.
There are two areas, if I may draw attention to them—issues that I think could have been considered within the budget allocation. First, whilst the budget continues to maintain core school funding, it again fails to provide the additional financial support that our schools across Wales so desperately need, in order to meet the £177 million inflationary pressures.
With most schools expecting to post deficits this year, the failure to address this crisis will not only compromise the quality of education our children receive, but will inevitably contribute to staff burn-out, job redundancies and mental health concerns within our teaching staff. I hope the Welsh Government would consider doing more to empower our schools, with greater financial autonomy and flexibility, and consider reforms such as broadening the eligibility criteria for the pupil development grant.
The second area is that of rural affairs. Despite the disproportionate impact these cuts will have on the very heartbeat of Wales, we see a further cut to this budget. We know that our farmers and the agricultural community are already suffering, both in terms of their concern around the proposed sustainable farming scheme, but also the additional past issues that there have been and that continue, such as bovine TB. The discontent of our farming communities will be further exacerbated by the 13 per cent reduction to the rural affairs budget—a loss of £62 million in vital funding. I do hope that the Minister would be open to discussing these further, and to look at what can be done to further support our rural communities, which are the heartbeat of Wales and produce so much for us in terms of our economy. Diolch yn fawr iawn, Dirprwy Lywydd.

Rhianon Passmore AC: The 2024-25 budget round has presented the most stark and most painful budget choices for Wales in the quarter of a century since the dawn of devolution. The Tories have fundamentally mismanaged the UK economy over the last 14 years, giving us more than a decade of so-called austerity or cuts, the disastrous mini budget, a mind-blowing so-called cost-of-living crisis, record inflation and now a recession. Oh, and I forgot the worst debt since the second world war.
The Welsh Government, though, is making £190 million of extra revenue and capital allocations at the final budget stage. So, let this Senedd never forget that the vast majority of our funding settlement comes directly from the UK Tory Government in the form of our block grant. When the UK Government makes spending decisions in a devolved area in England, Wales will receive a funding consequential, or it should. However, this has more recently become a last-minute game of Russian roulette. Even after the additional late consequential funding from the UK Government, our final settlement is still worth up to £1.2 billion, and some say £1.5 billion, less in real terms in 2024-25 than expected when it was first set in 2021.
So, when people ask me, 'What difference does voting do?', or 'What are the differences political parties make?', there is one simple and clear answer: a huge difference. A UK Government that not only believes in and funds growth, but that believes in public services and wishes to fund them, not decimate them. And this alone will directly and radically be felt throughout Wales. And with our devolved Senedd being able to debate and discuss and dictate the spending of this additional funding, in total, the Welsh Government has been able to improve its total budget for 2024-25, starting in April, by £190 million on the draft budget. However, others have mentioned that great planning uncertainty has been compounded by the UK Tory Government's failure to provide full information in a timely manner to the Welsh Government about the funding consequentials at the same time as other UK Government departments have had theirs.
I was particularly heartened to see the Welsh Government providing the additional £5.25 million for the apprenticeship programme, and the 2024-25 Welsh Government budget providing an extra £450 million to support the NHS, on top of the additional £425 million we made available in October in the last round. And this means that the Welsh Government is increasing funding for the NHS in Wales by more than 4 per cent in 2024-25, compared to less than 1 per cent in England. But even with this additional funding, though, 2024-25 will still be a hugely difficult and challenging year for health boards and councils. And this is a consequence of over a decade of a very poor Welsh settlement.
The Welsh Government has also managed to protect the core local government settlement, which is funding schools, social services, social care, our bin collections and local leisure services. But is it enough? Of course it's not enough. Llywydd, there is no doubt that 2024-25 will be a very difficult year for public services, because our funding settlement is simply not sufficient. Our colleague Jane Dodds mentioned bread and the butter. We do not have the tiles on the roof of the home that we wish to keep dry. Put simply, we do not have enough to meet the needs of the people of Wales.
So, to conclude, until the people of Wales are able to participate in a general election—[Interruption.] I've almost finished—and vote for a UK Labour Government, it will be up to the Welsh Labour Government to do all that it can and continue to do to aid Wales through these hugely troubling times. I also want to thank the Minister and also my fellow colleagues on the Finance Committee, and I want to support this Welsh Government budget. So, I commend it to all the colleagues in the Senedd in this place. Thank you.

Heledd Fychan AS: It's difficult to make comments on today's budget, because there are so many things to be concerned about. We've heard from a number of stakeholders regarding their concerns. In my region, recently, I had a sixth cost-of-living networking event, and a number of the organisations present there who work so hard to support people in their communities were greatly concerned about a number of programmes coming to an end, such as, for example, free school meals in the summer holidays. There are so many things that we could be achieving with investment.
A number of these points have been made through the scrutiny committees and during previous discussions and debates, so what I'd like to focus on today, which perhaps isn't a surprise to the Minister, are the cuts specifically to the culture sector and the cultural sector more widely, which are often missing in this conversation, because often they are seen as optional things, nice to have when we have the funding available. But, for us in Wales, they are a crucial part of our identity, and I believe too very strongly that they're an important part of the development of the economy of Wales. You look to Scotland, you look to Ireland; they invest more in culture, more in their national museums. They do that because they see the economic benefit. They also see the value of culture in terms of ensuring some of the things that they are trying to achieve, for example, with regard to health, because there are major benefits. We see a number of schemes and plans with regard to dementia, where collections in museums can be very powerful in terms of forging those little links in people's minds. There are so many things beyond what we believe is important; it's not just the object in a display case, but the way that they're used. And also, if you look at the national collections—I've talked about health—in terms of the anti-poverty agenda, there are a number of projects that encourage young people and children to think, 'Well, I can achieve something. There is something of value in my community.' Because, all too often, a number of the communities that we represent hear very negative things about their community, how things used to be, but they think that there perhaps might not be any hope now, and that link with the past can encourage so many people. So, I am concerned when we do see sometimes this as a separate issue to budgets such as for health and education and the anti-poverty agenda.
Dafydd Rhys from the arts council has asked for a national conversation about these cuts, but also about the vision for Wales, and I'm pleased that we're working on a cultural strategy as part of the co-operation agreement, but I do believe that it is a wider conversation that needs to be had across Government: what do the arts and culture mean to this Government? Because what we've seen is cut after cut being made, and I'm very much concerned about the future of the national collections. We have heard warnings from our national institutions, from the National Library of Wales and the national museum of Wales, that the collections are at risk. The same warnings were heard in Brazil, and then we saw the fire that destroyed 92.5 per cent of the national collection. We can't ignore these calls.
The Public and Commercial Services Union has shared a letter with me this afternoon that they received from the Deputy Minister on 13 February that outlines that, through the co-operation agreement, we've been able to repurpose revenue allocated to deliver the cultural strategy to mitigate the impacts of job losses in the national library, Arts Council of Wales, the museum, and the wider cultural sector.
Now, PCS claims that this funding to mitigate the impact of job losses is only going to be able to be used to pay for redundancies through the voluntary redundancy scheme, and they claim that this funding must be claimed retrospectively to fund the costs related to the redundancy scheme, and can only be used to help to reduce the workforce of each institution. Could you outline what is meant by mitigating the impact of job losses, and will you confirm that the funding that has been reallocated will not be used on redundancies? We need staff as well as safe buildings to care for our collections, and I would like to have an assurance that this funding won't be reallocated for redundancies, whilst also welcoming, of course, the decrease in the cut to the royal commission on ancient monuments and Cadw, but there is still a cut, and it's concerning.

Jenny Rathbone AC: Our budgetary position remains really challenging for a whole host of reasons, and it doesn't look like changing any time soon. All public bodies are going to have to find new ways of working if we are to heed the words of Sir Paul Williams in 2013, which are that
'radical change is needed for public services to survive in a viable and sustainable form.'
We remain a very long way from the Commission on Public Service Governance and Delivery recommendations, and that I think remains a very big challenge for all of us.
I understand the reasons for prioritising front-line services in health, local government and supporting families to survive the cost of living through the discretionary assistance fund, the single advice fundand the all-important basic income pilot for care leavers, which we've already discussed this afternoon.
I was glad to hear Rhun ap Iorwerth mentioning the importance of prevention, because I want to highlight the comments from the Future Generations Commissioner for Wales that there is currently not a whole-budget approach to prevention. Unfortunately, there's evidence throughout the budget documents of preventative spend being reduced, and there's little evidence of analysis of the longer term impact of this, which will have the potential to increase demand on future services. We are not short of examples daily of children's developmental delay, which obviously incurs more cost, the deteriorating general health of the nation, or the impact of people's reduced spending power on small businesses, like the hospitality sector. The health service cannot survive as a publicly funded body free at the point of care unless we can be more effective at preventing people from getting sick in the first place.
Every month, we know that 1.5 million people consult primary care. That is half of the whole population. And the current health Minister has done a great deal to push more money down the line to primary care to accommodate all those people who need the support of primary care to grapple with the ill health that they already are suffering with. We need to have strategies to reduce the numbers of people who are being referred to secondary care—1.5 million people every single year. That's half the population. We truly are a very sickly nation. So, I commend the work of our health boards for bringing down waiting lists—again, not something the opposition ever mentions—and, indeed, reducing the nursing agency bill by £65 million by recruiting and retaining more nurses on health boards' own books.
But there are huge challenges remaining around the pay claims that junior doctors and now consultants are lining up for to reflect the increasing cost of living. And there is nothing but frustration in my mind at the intransigence of the UK Treasury for failing to tell the Welsh Government in any sort of a timely fashion what consequential we can expect for the reported settlement of NHS pay claims in England. How irresponsible is that? We absolutely cannot enter into pay negotiations until we know what money the Welsh Government has at its disposal. These are the sorts of challenges we face.
It was very good to hear Heledd Fychan speaking about the cuts to our cultural institutions and the link between culture and health. Wales does need roses as well as bread in order to marshal the support from our communities for a cohesive Wales against the relentless attacks on our devolved Government, not just from Westminster but also from commercial interests abroad. We have to harness the ingrained sense of solidarity, today of all days, on the fortieth anniversary of the 1984 miners' strike, that binds our communities together, that keeps alive our cultural cohesion to combat the malevolent misinformation that pits one individual against another with a 'me first' culture that I've no doubt will be reflected in the financial statement by the UK Chancellor tomorrow.
So, just going back to our cultural institutions, both the national museum, which is in my constituency, and the national library, are sustaining over 10 per cent budget cuts, and I'm concerned about the impact of the inevitable job losses on the viability of both important national cultural bodies. Forty jobs are likely to go at the national library, and up to 90 at the national museums. This additional financial support that Heledd Fychan was talking about has been made available in this financial year so that those organisations are not facing both cuts in services and inevitable redundancy payments at the same time as a reduced budget.

Y Dirprwy Lywydd / The Deputy Presiding Officer: Jenny, you need to conclude, please.

Jenny Rathbone AC: But it is being financed by repurposing £2 million of revenue originally allocated to Wales's cultural strategy. Are the governance structures fit for purpose to steer those organisations through the current financial and organisational challenges and are they really involving staffin the difficult decisions to be aligned with the social partnership and public procurement—

Y Dirprwy Lywydd / The Deputy Presiding Officer: Thank you. Thank you, Jenny—

Jenny Rathbone AC: How good are these collaborative arrangements—

Y Dirprwy Lywydd / The Deputy Presiding Officer: Jenny, you need to conclude, please. You've had more than time.

Jenny Rathbone AC: —with each other and organisations like the Books Council of Wales? The £1.4 million extra allocated—

Y Dirprwy Lywydd / The Deputy Presiding Officer: No. Jenny, I—

Jenny Rathbone AC: —to Cadw—

Y Dirprwy Lywydd / The Deputy Presiding Officer: —I've asked you to conclude.

Jenny Rathbone AC: —and the Royal Commission on the Ancient and Historical Monuments of Wales is welcome, but how well are these organisations working together, when they sound very similar—

Y Dirprwy Lywydd / The Deputy Presiding Officer: I call on the Minister for Finance and Local Government to reply to the debate.

Rebecca Evans AC: Thank you very much. I'm very grateful to all colleagues for their contributions in the debate this afternoon. And just to, I suppose, reflect, really, that the budget has been about addressing those concerns that people tell us are most important to them, and that is core front-line public services, but, as we've heard throughout the debate this afternoon, it has meant that some really difficult choices have been made right across Government to support the additional funding that we have been able to provide for the NHS in particular. And, of course, we're committed to supporting the NHS to meet the continuing pressures that it's facing, including the unavoidable demand in inflationary increases, as well as some other post-COVID pressures, which the NHS is still working through at the moment.
So, as you know, we'll be investing a further £450 million now in the NHS next year, but that's on top of the £425 million that we made available in October. That's equivalent to an increase of more than 4 per cent in 2024-25, compared to less than 1 per cent for the NHS in England. And the Treasury's own figures, in their most recently published figures, show that, in Wales, we spent 14 per cent more per head on health and social care combined, and that shows—. It does say something, speaking to the level of demand that we have, but it shows the level of commitment also that we have to the NHS and to social care here in Wales. But even with that additional funding, it will be, nonetheless, a challenging year for the NHS, and I know that the health Minister has been very clear as part of the NHS planning process—

Gareth Davies AS: Will you take an intervention?

Rebecca Evans AC: I will shortly.

Gareth Davies AS: Thanks.

Rebecca Evans AC: That she has set out the priorities for next year, and the NHS Wales planning framework for 2024-27 does set out the priorities for three years and recognises the need to stabilise the financial position of those organisations. I'll take the intervention.

Gareth Davies AS: Thank you very much, Minister. In previous debates, not so much today, we've spoken at length about the uplift in the NHS fund—as you quoted there, the figure—but when you compare that to how many health boards are in the red in Wales, and it's been remarked on in previous debates, as I've said, about, you know, it actually being breaking even at best, or maybe a real-terms cut in reality to how much red NHS services are in. So, obviously, we welcome more funding for the NHS, but, in reality, what's that going to look like at the front line of services? Is it going to be felt by nurses and health professionals in the sector, or is it just a—? You know, is it just a remark to make the Government look good, basically?

Rebecca Evans AC: What we're trying to do is recognise the immense need that there is within the NHS, and one of those is particularly around pay. That's one of the greatest pressures that we are facing within the NHS, and one of the struggles that we do have is the fact that the UK Government announced a pay award related to the NHS 'Agenda for Change' back in March of last year and we still don't even know in March of this year whether or not that funding is baselined into next year. So, we've made some assumptions in the budget that we're voting on today, and hopefully, we'll have some clarity on that tomorrow. Again, it speaks to the level of risk that we carry from year to year when we have to make assumptions about significant amounts of funding that might or might not be coming to the Welsh Government. But, as I say, we hope to have some clarity on that in the UK Government's budget tomorrow.
We've also recognised that protecting social care is a key thing that people across Wales hold very dear to their hearts and something that we've prioritised in this budget, alongside other front-line public services delivered by local government. That's why we're able to provide a 3.3 per cent increase to the budget. You'll remember that we had intended a 3.1 per cent increase, but, having listened to colleagues in Plaid Cymru in particular, who have asked us to prioritise funding for local government should additional funding become available to us, we were able to provide that additional £25 million, partly through the social care workforce grant, but then £14.4 million of that into the revenue support grant, meaning that there will be an overall 3.3 per cent uplift now, which is an improved position for local government.
It's really important to recognise as well that we have prioritised education and particularly schools within the budget.So, that 3.3 per cent uplift recognises that local government primarily delivers support for schools, but we have nonetheless protected, for example, our Recruit, Recover and Raise Standards programme. We had intended, actually, to taper that off this year, but the education Minister was clear about the benefit that that brings to schools, which is one of the reasons why we've not tapered that, as was originally planned. And again, looking at those Treasury figures, we spend 17 per cent more per head in Wales on education than they do across the border in England, again speaking to the priority that we put on education. So, I don't think that the contributions that we've heard from the Conservative benches, suggesting we don't prioritise education in the way that we should, ring true when we show the level of protection that we provide and the significant amount of additional funding per head that we provide here in Wales.
And again, we've tried very strongly to protect apprenticeships as far as possible. For more than two decades, our apprenticeship programmes in Wales have benefited from EU funding, delivering lower unemployment, boosting skills, growing businesses, but not a penny, now, of those funds is available to us moving forward. We're at least £375 million worse off every year as a result of the UK Government's so-called levelling-up process, and of course that's in addition to the fact that our budget is worth so much less next year as a result of inflation. Apprenticeship investment, though, does remain the No. 1 spending priority for the economy Minister's department, recognising the long-term benefits that they bring to learners and the economy as a whole, as well as the major funding pressure, or in spite of the major funding pressure that's been driven by that loss of EU funds. We'll still be investing over £140 million in quality apprenticeships next year, and I think that that is important to recognise.
And then I also want to recognise those comments about supporting rural communities as well. We've worked very hard to protect the basic payments scheme. Again, that's a shared priority with Plaid Cymru, and I know that it's something that's very important to Jane Dodds as well. In protecting that, we've listened to farmers across Wales who've said that it was really important that when we're facing these tough choices across Government, actually the basic payment scheme was their top priority and we have protected that for the next financial year as well, and that was in the face of significant pressures right across Government. It's actually one of the largest single areas of funding that we could look to, so protecting that, I think, was quite remarkable for us to be able to do that.
So, just looking ahead to tomorrow, of course, things change almost immediately in the sense that the UK Government will be bringing forward its spring statement. What would we like to see from that? Well, we want to see the Chancellor using any headroom that he might have available to him to invest in public services and not to build up problems for the future by making promises and making commitments that just aren't realistic. Austerity didn't work the first time around, and we certainly don't need another dose of that. What we need is investment. And it's not just us saying that. The London School of Economics growth commission, for example, and the Organisation for Economic Co-operation and Development, all of these organisations say that the way to grow the economy is to invest in infrastructure and is to invest in skills, and that's what we're asking the UK Government to be doing tomorrow.
Our Wales-specific asks, of course, relate to something that the FM was talking about in FMQs earlier today, and that's specifically around a small contribution to our efforts to address the legacy issues in relation to our coal mining heritage. And then, also, fair play on rail. We know that Wales has already lost out more than £250 million as a result of the misclassification of high speed 2. That can't continue, so we need to see fair play on rail as well. So, those are some of the key things that we're asking the Chancellor to address in his statement tomorrow. But as I mentioned earlier on today, I look forward to providing an update to the Senedd as soon as I can after that statement.

Y Dirprwy Lywydd / The Deputy Presiding Officer: The proposal is to agree the motion. Does any Member object? [Objection.] There is objection. Therefore, I will defer voting under this item until voting time.

Voting deferred until voting time.

5. Debate: The Local Government Settlement 2024-25

The following amendments have been selected: amendments 1 and 2 in the name of Darren Millar.

Y Dirprwy Lywydd / The Deputy Presiding Officer: Item 5 today is the debate on the local government settlement for 2024-25, and I call on the Minister for Finance and Local Government to move the motion. Rebecca Evans.

Motion NDM8500 Lesley Griffiths
To propose that the Senedd, in accordance with Section 84H of the Local Government Finance Act 1988, approves the Local Government Finance Report (No. 1) 2024-25 (Final Settlement - Councils), which was laidin the Table Office on 27 February 2024.

Motion moved.

Rebecca Evans AC: Today I'm presenting to the Senedd for its approval the 2024-25 local government settlement for the 22 unitary authorities in Wales. First, I'd like to record my thanks to local government, both elected members and staff across local government services, for the critical work that they do for communities, people and businesses across Wales. It's been an extraordinarily pressurised few years for local government, from floods, to pandemic, to the ongoing cost-of-living crisis, and I hope you'll join me in thanking them for their hard work and dedication. In preparing for the Welsh budget and this settlement, we've engaged closely with local government throughout, and I'm grateful to local government for the way those discussions have been held.
The Welsh Government's budget is worth up to £1.2 billion less in real terms than it was when it was set at the comprehensive spending review in 2021. Our settlement, which comes largely from the UK Government in the form of the block grant, is not sufficient to meet all of the pressures public services face as a result of persistently high inflation and rising demand. Even before this period of high inflation, we knew that the third year of the spending review would be the toughest.
As we've developed the 2024-25 final budget, we've prioritised protecting core front-line public services as far as possible, supporting the hardest hit households, and prioritising jobs where we can. As I've already informed the Senedd, I've used the recently announced consequential funding allocations to increase the local government settlement by £14.4 million. This reflects the importance of these core public services and responds to calls from local authority leaders and others to prioritise local government if further resources became available.
This year, I propose to the Senedd a settlement for 2024-25 that is 3.3 per cent higher than in the current financial year on a like-for-like basis. And in cash terms there's an increase of £184 million. In 2024-25, local authorities in Wales will receive £5.7 billion in general revenue allocations from core funding and non-domestic rates. No authority will receive less than a 2.3 per cent increase. In addition, I've provided indicative information on revenue and capital grants planned for 2024-25. These amount to over £1.3 billion for revenue, and nearly £1 billion for capital for our shared priorities with local government. This includes the restoration of £10 million for the social care workforce grant, responding to specific points made by Members and local authorities. General capital funding for local government in 2024-25 will be unchanged from last year at £200 million, and this includes £20 million to enable authorities to respond to our joint priority of decarbonisation. I ask colleagues to support the motion.

Y Dirprwy Lywydd / The Deputy Presiding Officer: I have selected the two amendments to the motion, and I call on James Evans to move amendments 1 and 2, tabled in the name of Darren Millar.

Amendment 1—Darren Millar
Add as new point at end of motion:
Regrets the substantial increases in council tax due to underfunding by the Welsh Government.

Amendment 2—Darren Millar
Add as new point at end of motion:Calls on the Welsh Government, before the next local government settlement, to:
a) commission an independent review of the Welsh local government funding formula;
b) work with local authorities to use their useable reserves to keep council tax as low as possible; and
c) require any local authority proposing a council tax rise of over 5 per cent to hold a local referendum and obtain a yes vote before implementing the proposed rise.

Amendments 1 and 2 moved.

James Evans AS: Diolch, Deputy Presiding Officer, and I move the amendments tabled in the name of my colleague, Darren Millar. I'd like to begin by thanking the Deputy Minister for your statement today and by acknowledging the work of councillors and council staff, right across Wales, who are working on budgets at a very, very stressful time. As a former councillor and cabinet member myself, I remember the pressures all too well that we had to deal with in setting budgets, and it's not always a very pleasant experience, balancing the books, when many council services are crying out for more and more funding. This time it feels particularly difficult.
There are huge increases to council tax being proposed across Wales, and hard-pressed taxpayers are going to be hit the hardest in their pockets. As an example, in Pembrokeshire, the proposed council tax rise is 16.31 per cent, which means the average band D council tax will raise by over £219. It'll be the third largest council tax rise in Wales since 1997-98 in percentage terms, and the largest council tax increase across the whole of England and Wales since 2012-13. In Ceredigion, the council tax hike is 11.1 per cent, the second highest in Wales. This means the basic level for a band D average property there will leap from £1,553.60 right up to £1,726.05. There are, of course, many other councils where there are substantial council tax rises, at the same time as services are being slashed. People are literally paying, across Wales, more for less.
These councils do not exist in a vacuum. They rely on a funding formula from you. Minister, it's pretty clear to most observers that the Welsh Government's funding formula for councils, which is agreed with the Welsh Local Government Association, is not fit for purpose, and we have a scenario in place where rural councils lose out, and so do those in north Wales. This creates a system of winners and losers by design. We, as Welsh Conservatives, want to see an independent review into the funding formula because the status quo isn't working; it isn't working for those councils in difficult positions, and it isn't working for the people we serve. And I know, when I was sat on the WLGA, along with my colleague Peter Fox, the Welsh Conservatives on there have long called for reviews of the funding formula, only to be blocked time and time again by Labour councillors.
There is also much work that the Welsh Government can do with councils on better use of useable reserves in order to protect the important services and support the most vulnerable at an increasingly difficult time. It is often said that reserves are there for a rainy day, and I would suggest to all those councils who are sat on large reserves that this is a rainy day now. People out there won't understand why better use isn't made of council reserves. Indeed, there is widespread bemusement at the entire budget-setting process and the way people are being slapped with huge council tax rises without the public being informed. That isn't right. People should be brought along in this process and their consent should be sought. That's why we would like to see, on these Welsh Conservative benches, any local authority that proposes a council tax rise over 5 per cent holding a local referendum for their tax rises. If they don't get the backing from the public, then rises don't go through. If they don't go through, the councils will have to go back and think again.
It is clearly a difficult time for councils, but there is more that this Welsh Government can do to be easing the way for local authorities, and steps should be taken in order to reduce the need for those councils who are pushing council tax hikes higher and higher. It is also jarring for the people we represent to see the Welsh Government filtering large sums of money on unpopular policies, like more politicians, a default 20 mph speed limit, and even buying Gilestone Farm in my constituency. Councils and councillors are told by this Welsh Government that there simply isn't enough cash to support them. If this Welsh Government believes that, perhaps they need to be better custodians of how public money here is spent. And all I can say to Members in this Senedd is, 'Support our amendments today', and, if the Deputy Minister's got something to say, I'll gladly take an intervention from him. Diolch.

Peredur Owen Griffiths AS: It's no exaggeration to say that this debate comes at a time when there's an existential crisis in our local authorities. Fourteen years of Tory-driven austerity has left local government finances in Wales in an utterly ruinous state, compromising the ability of local authorities to provide even the most basic level of public services. The prospect of bankruptcy, which has already come to pass in several councils in England, now looms large. A recent survey by the local government association has shown that almost one in five local authorities believe it's likely or very likely that they will need to issue a section 114 notice in the next 24 months due to funding pressures.
We welcome the 3.3 per cent increase to the core settlement for local authorities, which will alleviate some of the extreme pressures they are facing. We're also pleased that the Welsh Government has heeded Plaid Cymru's call for the £25 million in consequential funding that was received last month to be passed on to local government. While we remain of the view that a more effective use of the money would have been to raise the minimum funding floor for the revenue support grant to 3 per cent, any additional resources, regardless of how they are distributed, will make a positive difference. But in the context of stubbornly high inflation, high energy prices and an ailing UK economy, the reality is that the core settlement can only go so far. Councils across Wales are still having to make extremely difficult decisions on further cutbacks and significant hikes to council taxes.
Now, it's clear from their amendment that Tory Members here are rightly concerned about the latter, but, as usual, they have completely failed to acknowledge the culpability of their Westminster colleagues in pushing local authorities to the brink. They also seem to be labouring under the delusion that resolving the situation is simply a matter of local authorities dipping into vast reserves of wealth they have been squirrelling away for no good reason. As for the suggestion of making increases of over 5 per cent to council tax subject to a local referendum, it's worth reminding everybody that Tory-controlled Monmouthshire County Council increased their council taxes above the Wales-wide average in 2021. Those Conservatives in Monmouthshire didn't feel the need to refer that decision to the local electorate. Moreover, Wrexham County Borough Council, which is currently run by a combination of independents, Tories and Lib Dems, will be introducing a near 10 per cent increase in council tax for the next financial year, again without holding a public vote. I'd also query the wisdom of forcing councils to conduct costly and time-consuming referenda every time they are forced to make a difficult decision on council taxes. I think that most councillors, of every political persuasion, would agree with me when I say that this will only exacerbate the squeeze on their already overstretched resources. Rather than talking down the efforts of hard-working councillors across Wales, or proposing unhelpful gimmicks, the time and energy of Tory Members would be better spent pointing the finger of blame squarely where it belongs. I'm of course talking about the UK Government, whose policies since 2010 have led to a 12 per cent real-terms erosion in the spending power of local authorities. They would also do well to highlight the fundamental unfairness of Westminster's current funding arrangements for Wales, and I am pleased that this was reflected in their contribution to last week's debate on budget flexibilities.
And on that matter, every Labour Member here has a responsibility to call out the inaction and silence of their own UK party leader, because while the neglect of Wales by the current UK Government has been well established for some time, it's also apparent that Keir Starmer's Government-in-waiting is offering nothing but the same. I've heard the First Minister claim on several occasions that a change of Government at Westminster will deliver the investment that we need in Wales to restore the beleaguered public services. On the face of it, this seems somewhat naive, as it's at odds with the reality of Starmer's actual vision for being in power, which is predicated on a rehashed version of austerity and a pledge not to turn on the spending taps. Most damning of all, despite being given many opportunities to do so, Starmer has consistently refused to commit to the fairer funding model that Wales desperately needs. He is therefore failing our local authorities, who are crying out for a definitive end to this era of austerity. It's incumbent on us all, therefore, to stand up for our local authorities by sending a clear message to both major Westminster parties that business as usual is just not good enough and to demand better from them for the people of Wales. Diolch yn fawr.

Mike Hedges AC: The local government settlement is just one of the parts of local government income, albeit the major part. Prior to the centralisation of business rates, local authorities used to raise a much higher proportion of their income locally, and I would like to see business rates return to local authorities. Councils get income via council tax, and councils also get income from fees and charges that they levy. It is not possible to compare councils in terms of their Government support. In Blaenau Gwent, over half the properties are in band A. In Monmouthshire, there are 500 band A properties. So, for any council tax increase based on band D, Monmouth will raise considerably more.
The main driver of Welsh Government support increasing is population change. Councils with a population increase will get a higher percentage rise than those with a declining population. We see the largest percentage rises in Newport, Cardiff, Swansea and Denbighshire, which apparently has now moved its geographical location to south Wales. Second homes and homes registered as holiday lets are reducing the support for some councils. Changing the formula is easy—it just creates winners and losers. When I was involved, the highways standard spending assessment was moved from 52 per cent population and 48 per cent road length, to 50 per cent for each. It seems reasonable, doesn't it? This moved several hundred thousand pounds from Cardiff, Swansea and Newport to Pembrokeshire, Gwynedd and Powys. I again ask the Welsh Government to provide the detailed SSA and detailed aggregate external finance calculations—they've got to exist, in order to provide the final results. Why is the Welsh Government unwilling to show its workings? The Conservatives said that the percentage increases in north Wales are unfair and that the formula favours south Wales. Show it. The only way you can get the Conservatives to accept it is to show the calculations so that they can redo them themselves.
I would like to see councils get more Welsh Government support. But what's happened in England? We have seen councils such as Northamptonshire and Birmingham become, effectively, bankrupt, proving that large councils are not immune to serious financial problems. In the face of unprecedented challenges, we have been warned that several local authorities in England either have already issued section 114 notices, or are likely to do so, effectively announcing that they are unable to deliver a balanced budget. We've seen some of the smallest councils in England build up huge debts by buying supermarkets, business parks and offices, tying the future of their public services to the uncertainty of the property market. Councils across England have borrowed huge sums—in some cases, the equivalent of 10 times their annual budget—to finance the purchase of real estate. Spelthorne Borough Council have so far borrowed £1 billion, despite having a net annual budget of just £22 million. This equates to 46 times its spending power. Three other councils—Woking, Runnymede and Eastleigh—have borrowed more than 10 times their annual budget. In Wales, no council has gone bankrupt or gambled on the property market, at least in part because councils have been better resourced in Wales—not well resourced but better resourced. But there is a serious financial threat currently and budgets are tight. When additional duties are placed on councils by the Welsh Government and no additional money is provided, then pressure is put on existing services. Welsh councils need a better funding settlement that acknowledges the vital role they play and the very important services they provide.
As part of the programme for government, the Welsh Government are committed to reducing the bureaucratic burden on local government, and I think that would be welcomed by all local authorities. Local authorities have highlighted grants management and administration as the area with the greatest opportunity for change. I am pleased that the work is under way to reduce the number of separate grants paid to local authorities and to consider moving grants into the dehypothecated settlement. I'm pleased that the Welsh Government will continue with this work this year. Putting money in or out via grants is incredibly expensive. I know it's done because there are Ministers who wish to micromanage council activity, or, more likely, ministerial civil servants who want to micromanage council activity—perhaps people who've never run a council or never been involved in the running of a council themselves, so their expertise cannot be underestimated.
Local authorities need more money, but if you compare the settlements, and we keep on comparing England and Wales, we've got no council that has gone bankrupt yet, and we've got no council owing over 10 times its annual income having bought lots of supermarkets and other businesses and office blocks. As we've seen throughout our own communities, office blocks and shops quite often end up empty. I think it's really important that our local authorities avoid doing that. It's not the best settlement. I would have given local authorities more, but it's the best the Welsh Government are prepared to give them.

Peter Fox AS: Local authorities play such an incredibly important role in providing services that the people in Wales depend on, and we all thank them for everything they do. True devolution, though, is not just supporting the Senedd;it's about supporting our local authorities, who are at the forefront of democracy and operate at the chalkface. Many of us across the Chamber, as we've heard, have been local councillors and know the responsibilities that come with the role, and we know the difficult choices that have to be made when given a limited budget. Sadly, this budget presents a huge real-terms cut, making it more limited this year as a direct result of the choices and decisions taken by this Government. We see ever-increasing pressures being put on local authorities, but with limited resources passed on to deal with them.
Whilst I am glad to see the £14.4 million of additional revenue from consequentials passed on to local authorities, and I'm also pleased at the reinstating of the social care workforce fund asked for by council leaders, we can't get away from the fact that the real-terms cuts that are being forced onto local authorities will inevitably punish residents across Wales. It is the people of Wales who are having to pay the price for the real-terms cuts, with Welsh families paying an average increase of a whopping 8.28 per cent in council tax at a time when households are under immense financial pressure.
I know the Welsh Government will revert—we've heard it already—to blaming the UK Government for the cuts to local government settlement.

Carolyn Thomas AS: Will you take an intervention?

Peter Fox AS: I certainly will.

Carolyn Thomas AS: I know, in the past, that some councils, rather than raise council tax, have cut education funding earlier, and other funding. They've been absolutely cut to the bone, which has meant they've not been able to deliver essential public services. I think that's what the case is now after all that austerity—they've been cut to the bone. Do you believe that that is the balance, really, and that is why they're having to put up council tax, because it's a balance and they can't cut those essential services any more?

Peter Fox AS: Okay, well, lots of leaders and lots of administrations in councils will decide how they arrive at their budget. Some will be more innovative and look at creating income streams in other ways. Others will be led very clearly by their officers and make decisions that lots of us wouldn't agree with. So, that's why you'll see a whole range of different types of levels of cuts to services across different authorities. In Monmouthshire, we always tried not to cut core services; we'd look for innovative ways to generate income instead, and I think more could be done across all the local government family to achieve that. I've forgotten where I was now, Dirprwy Lywydd.
I know, as I said, that the Government will revert to the UK Government for the responsibility for the cut, but the real-terms cut levelled on councils is nothing but a stealth tax on the people of Wales. The Government knew perfectly well that councils would have to pass on their pressures onto their residents through council tax or face cutting services.
I want to turn to the issue of the funding formula, which remains a contentious issue as it simply is not fit for purpose anymore. I will continue to raise it whenever I can, because we have a system that currently would allow some councils to descend to a point where they struggle to maintain many services, cutting both statutory and discretionary, whilst others can manage relatively well with significant accumulated reserves.
I've said it before and I'll say it again: we need an independent assessment, we genuinely do, and a review of the local government formula to ensure that councils across Wales get a fair deal, and that includes, as Mike has said, an assessment of the SSA and the many indicators within that: 70 plus indicators, indicator-based assessments, all need to be looked at. They haven't been looked at for many years.
I know the stock answer will be that if council leaders ask for it to be reviewed, the Government would facilitate. This is a cop-out. As we know, few council leaders will agree to it, as there would be winners and losers following a review. I've tried many times: turkeys don't vote for Christmas. But if we are to see a consistent model of service provision for all Welsh people, the Government has to demonstrate leadership and reassure itself that the formula is fit for purpose. That can only be achieved through an independent review of the formula, and that's outside of the funding forum or distribution sub-group.
What we need to remember is the simple fact that the failure to fund our local authorities fairly and appropriately only results in families across Wales paying the price. Sadly, Labour Ministers are forgetting that. These decisions have very real consequences, as councils are forced to cut services or hike council tax, and it's the people of Wales that will be shouldering the cost. Diolch.

Rhianon Passmore AC: Minister, I do welcome the Welsh Labour Government's continued dedication to prioritise protecting core front-line public services as far as is possible in the face of extreme budgetary pressures to Wales. This commitment is values-based and cognisant of the holistic and critical work of local government.
The local government settlement for 2024-25 ensures that no authority will receive less than a 2.3 per cent increase. My constituency of Islwyn is governed by Caerphilly County Borough Council, and under these very difficult budgetary circumstances for Wales, I do welcome the 2.5 per cent increase that Islwyn's local authority receives from the Welsh Government. The Welsh Labour leader of Caerphilly County Borough Council, Councillor Sean Morgan, was quoted addressing the council chamber in the South Wales Argus last week, where he decried the Tory UK Government's funding settlement to the Welsh Government. Indeed, he called Rishi Sunak's Tory UK Government funding for Wales totally inadequate and a raw deal for the people of Wales, and he's dead right. His calls for Caerphilly council to condemn the current funding levels from the UK Tory Government and demanding a fair deal won rare and unanimous support from the entire council and across all benches. Indeed, the leader of the Plaid Cymru group on Caerphilly council, Lindsay Whittle, a former Member of this Senedd, told the meeting:
'There are times when all political parties in Wales need to…fight this oppression',
and on that he's right too.
Minister, you rightly acknowledge the close working relationship between the Welsh Government and local government in Wales. It is vital—[Interruption.] Well, this is what they said—that the Welsh Government and Senedd Cymru, the Welsh Parliament, listen to colleagues in local government and continue to develop and grow that close dialogue. This is why I enthusiastically support the Welsh Government's commitment as part of the programme for government to reduce the bureaucratic burden on local government. I know that work is under way to reduce the amount of separate grants paid to local authorities and to consider moving grants into the dehypothecated settlement if the wider context makes it appropriate.
The Welsh Government's budget has protected the core local government settlement that funds schools, social services and social care, our collections of waste and local leisure services. But we do know that it's not enough and that we do need a fair funding settlement for Wales. And however much you slice the cake up, Peter, I'm afraid if there's not enough cake—[Interruption.] You may, yes.

James Evans AS: Do you not realise that a lot of people out in the constituency that I represent, Brecon and Radnor—when you keep talking about the funding settlement from the UK Government—are extremely annoyed with the way the Welsh Government spends its budget, when they spend £4.25 million on Gilestone Farm, they spend money on a default 20 mph limit, and more politicians for this place? Do you not realise that my constituents get very angry when you keep blaming the UK Government when, actually, I think you need to look a bit closer to home for better budget management?

Rhianon Passmore AC: If I can just respond to that, I think if you actually look at the amounts of money that we are talking about, if we look at the billions that we have lost, and then if you look at some of the issues that you've brought to us on your agenda today, you'll find that that does not equate to a single crumb of that cake. [Interruption.] I will continue, Deputy Llywydd, if I'm allowed to.

Y Dirprwy Lywydd / The Deputy Presiding Officer: I would hope that all Members will ensure that the Member for Islwyn can continue her contribution in peace.

Rhianon Passmore AC: Thank you, Deputy Llywydd. So, Minister, will you use this opportunity to underscore, once again, how dedicated the Welsh Labour Government is to funding Welsh local government under the most dire circumstances, and that it values local government, and that it understands local government and its commitment to delivering the vital public services that it's charged with delivering for the people of Wales, not just with us, but for us, together, collectively? Thank you.

Janet Finch-Saunders AC: So, here we are, then, after years of fiscal mismanagement and failed vanity projects, we have finally arrived at the inevitable: some of the largest cuts in devolution history to local services, and the highest hikes to council tax across north Wales.
But the situation actually isn't funny, despite you laughing. Since 2000, council tax in Conwy has increased by 256 per cent, 20 per cent of this in the last two years alone, the highest of any in Wales. Therefore, I hope this debate goes some way to outline to voters, those who may just be watching today—if a good enough Welsh media pick up—just how bad things are for local government under Welsh—. This is after a quarter of a century of Welsh Labour. And, of course, Plaid Cymru are culpable also, particularly so—and I have to say, Peredur, that your contribution just, well, it surpassed all forms of comedy—because you've just spent the last three years working and voting with Welsh Labour nine times out of 10.
Once again north Wales has had to contend with a harsh reality: a consecutive year of receiving a lower council funding settlement compared to those in south Wales. Conwy has received the lowest increased settlement of only £3.9 billion from 2023-24, a reduction in real terms, a 2 per cent increase on 2022-23—[Interruption.] Go on, being as it's you, Mike.

Mike Hedges AC: Denbighshire had the fourth highest increase.

Janet Finch-Saunders AC: Thank you. That is a whopping 1 per cent less than the national average of 3 per cent. As I have stated here before, Conwy is facing huge cuts to local services. Education is seeing cuts of over 5 per cent this year. Nowhere in Wales is this more clear than in Conwy, with many constituents and parents writing to me, saying these cuts are simply unacceptable and heartbreaking. And I haven't held back in my response to those constituents. We've been calling for years for schools to be funded directly, looking at the second tier—you know, in north Wales, it's GwE. And there's the amount of bureaucracy and wasted money that my colleague James Evans has already mentioned.
To add insult to injury, Conwy is set to see one of the highest council tax rises across Wales, and, of course, it's Labour, Plaid Cymru and independent now in power there. It's a scandal. We must end this spiral to the bottom of the barrel. North Wales is being left to wither, and I say enough is enough. I would like to ask the Minister for finance—you must be having talks with your Labour colleagues—if, and only if, people were silly enough to vote them in to Government, not realising what they've done to Wales, what settlement in funding would you be providing to this Welsh Government?
Our leader, Charlie McCoubrey, said 30 per cent of the data used is long out of date, and that's to do with the funding formula. I held the role of shadow local government Cabinet Secretary, I think it was, in those days, and I asked for a funding formula review going back all those years. I was told by the Minister at the time, 'You're the only person who's asked for it, no leader of any of the councils has asked for it'. So, I wrote to all the council leaders and they wrote back to me in no uncertain terms that they agreed with a funding formula review. I'm going back now to around 2014, and here we are in 2024—we're still arguing about this funding formula. It's time that you looked at places like—

Rhianon Passmore AC: Will you take an intervention?

Janet Finch-Saunders AC: No, sorry, Rhianon. We can discuss this another time this week. But the point being, Minister, you're just going to keep defending this position year after year, term after term. What is it that you're so frightened of in holding an independent review of the local government funding formula? Is it the blatant reality that you know that Labour-controlled councils are doing much better, and those local authorities that hold high reserves? We've got one of the oldest demographics in Wales in Conwy with the older people, and our social care is on its knees. Surely you should be concerned, and every Minister around the Cabinet table concerned, when there's no real equality. It's word that's often overused in your agendas, but the real equality is missing in local authorities such as Conwy, where our older people now are being failed miserably and let down. Diolch yn fawr.

Carolyn Thomas AS: Following the mishandling of the economy with 14 years of Tory austerity, a failed Brexit, COVID cronyism and rising inflationary pressures caused by the Liz Truss mini-budget, public services are on their knees. Local authorities are cut to the bone right across the UK, so they no longer have enough to deliver essential services, and in England are facing bankruptcy. George Osborne started it in 2010. Philip Hammond continued it in 2017, saying to councillors, 'We just have to tighten our belts further'. There were no holes left on the belt then following seven years of cuts. How Jeremy Hunt thinks he can continue astounds me. How can he talk about more efficiencies when there are so many councils facing bankruptcy in England, with no more efficiencies to make? The utter devastation of services has been years in the making under the Tory Government. 
When I was first elected as a councillor in 2008, we used to say it cost £1 million a day to run a council. We're the second-biggest employer in Flintshire after Airbus, delivering education, social care, public protection, planning, and hundreds of other services, which have run smoothly and been taken for granted until now, when they are closing or difficult to access. Councils in north Wales have each made between £90 million and £120 million of savings over the last 14 years. Local authority officers already share staff back-office facilities and many don't have enough staff to deliver essential services, with vacancies taken as efficiency savings.
The Tory cost-of-living crisis and COVID have seen rising pressures of need in social services and in education. Now is when they need it most, not just during COVID. Recently, I visited Rhyl High School and Cian was keen to ask about education funding after being told he can no longer print off artwork for his art GCSE. They simply cannot afford the basics. Many schools this year are having to work with deficit budgets, and have to scrimp and save and cut back on the basics. They can't afford the rising energy bills, the staff, the curriculum, and these will have to be part of the council reserves going forward. Councils are using their reserves this year, borrowing from Peter to pay Paul for emergencies. I remember when we had the beast from the east, and we had snow that was 5 ft high in places—

Peter Fox AS: Would you take an intervention?

Carolyn Thomas AS: Yes, Peter.

Peter Fox AS: I know what an advocate you've been for local government for many years outside of this place, and you've challenged often the level of funding going to Flintshire. Do you agree then that the system is wrong, the formula is wrong, and it would benefit Flintshire so much more, as you've advocated, and your leaders have advocated, if it was looked at?

Carolyn Thomas AS: Yes, I have asked for the funding formula to be reviewed, but I know that the pie is too small. So, even if the funding formula was reviewed, all councils—

Peter Fox AS: It's the same pie—it's how you cut it up.

Carolyn Thomas AS: It's not big enough. I know that the council in Denbighshire has got much more funding than Flintshire—they play each other off against each other. That’s unfortunately what happens now. People are in-fighting, basically, so it’s not helpful anymore. We just need more funding for public services.
Homelessness is on the increase, and we’ve heard on the Local Government and Housing Committee that we are actually becoming a generation of renters, as people cannot afford mortgages. So, I welcome the extra £5 million of funding to the housing support grant, and that the Minister for Climate Change has now been able to allocate an additional £30 million for the housing support grant, taking it to just over £182 million. It’s an essential part of funding that helps people stay in their homes, as well as provide support and accommodation. The organisations, including local authorities, that provide this service are at breaking point and are struggling to pay the living wage, so it’s really welcome.
I am pleased that during the difficult 2024-25 budget round, which has presented the most difficult budget choices for Wales since devolution, local authorities have been made a priority. But it will be difficult, because the funding settlement is not sufficient to respond to all the pressures they’re facing, for any councils in Wales or England or Scotland. There has to be a change and we need an end to austerity from the UK Government Treasury. I join the calls for Jeremy Hunt to increase funding for public services and help those struggling the most due to the cost-of-living crisis in tomorrow’s budget. Thank you.

The Llywydd took the Chair.

Y Llywydd / The Llywydd: The Minister for Finance and Local Government to reply to the debate. Rebecca Evans.

Rebecca Evans AC: Thank you. I'll just begin by recognising that the settlement doesn't match the impact of inflation or the increasing demands that we're seeing on local authorities, but we also have to remember that this settlement does build on what have been improved allocations in recent years. I was really pleased to hear Members talk about the work that we've been doing to reduce the administrative burden on local authorities. That work has been really important and really effective this year in terms of moving a number of grants in their entirety into the revenue support grant, and then in other cases combining a larger number of small grants into a bigger grant, but then also that commitment to keep the other grants under review for the future as well. We’ve identified, perhaps as the next phase of this work, the need to look at our capital grants to local authorities as well, to ensure that the way in which authorities apply for those grants is proportionate, but then also that the monitoring and information requirements that we put on those grants is also proportionate moving forward as well. So, those pieces of work will be really important.
Alongside reducing the administrative burden work, we’ve also identified annual reports as a particular area that we are keen to explore, as to whether or not, again, our requirements there are proportionate and modern. So, that piece of work is important. Again looking at that work around reducing the administrative burden, we’ve been looking closely at the Verity House agreement that they have in Scotland, and I had the pleasure of meeting the Scottish Minister for local government recently to talk about their experiences there. And we are keen to explore how we might in Wales move forward formalising that relationship of trust that we have with local government, so that it’s put on that sound footing and we have the structures there that will be able to withstand the change of personnel and so on in future. So, I think that work is really exciting.
And then I was interested in Mike Hedges’s remarks around non-domestic rates as well. Just to let colleagues know that we are undertaking some work looking at rates retention for the city and growth regions as well, and that piece of work is ongoing in partnership with local government colleagues.
Turning to the amendments tabled in the name of Darren Millar, local authorities have had to make some difficult decisions in setting their budgets and their council tax over recent weeks, and we all recognise the impact of increases in council tax on households across Wales, and we know local authorities and our colleagues there are facing incredibly difficult choices as they work to do their absolute best for their local communities. The answer, however, isn’t to go about imposing arbitrary caps on local authorities, forcing them to further cut services, which we all know will have the greatest impact on the most vulnerable people. Neither is it to decide for authorities how they should use their reserves, interfering with their plans and risking their longer term sustainability. Across Wales, councils will have sought to balance the different needs of their communities, the level of their useable reserves and the impact of council tax rises, and they’ll be doing everything that they possibly can to provide efficient, cost-effective services that provide value for money. I think it’s just wrong to suggest otherwise.
The answer is for the UK Government to choose to invest—

Y Llywydd / The Llywydd: Can I ask for some silence? There's a lot of chitchatting going on, especially by the Member who probably shouted 'Hear, hear' at that point as well. [Laughter.] If I can ask for the Minister to be heard, that would be great. Thank you very much.

Rebecca Evans AC: Thank you. The answer is for the UK Government to choose to invest in public services in its budget tomorrow, providing public services, including local government, with the resources they require in order to deliver the services that their communities need. And it's also important that we all promote the range of support that we have in place to support people who are finding it difficult, and that we act to improve the fairness of council tax. Our council tax reduction scheme provides for consistent support right across Wales, and it does mean that 211,000 households receive full support and pay no council tax at all, but we do know that many more are eligible and are missing out.
On the formula, the core funding that we provide to local government is distributed through a well-established formula. It's created and developed in collaboration with local government, and agreed annually with local government through the finance sub-group of the Partnership Council for Wales. The formula is free from political agenda and it's driven by data. It balances relative need and relative ability to raise income, so that authorities across Wales are treated fairly and even-handedly. And I was reminded, as colleagues on the Conservative benches were talking in the debate this afternoon, of Rishi Sunak, when he was caught on camera saying that he wanted to transfer funding away from disadvantaged areas, and it seems that the Welsh Conservatives want to do the same. There's an ongoing work programme to maintain and update the formula, including how the formula needs to respond to our work to make council tax fairer, and to the other changing policies and circumstances. Sorry, I didn't see the Member seeking an intervention.

Mark Isherwood AC: Thank you very much for allowing me to intervene. Do you recognise the concern in north Wales where, once again, four out of the six north Wales councils are four out of the six receiving the lowest settlement, including the area with the lowest GVA prosperity per head, and the area with the highest older people's population?

Rebecca Evans AC: The settlement itself is a result of changes in deprivation—it's changes in population, it's reflective of sparsity, and all of those things do change, every year, meaning that there are some shifts in the relationship between individual councils and the settlement they receive. The funding formula in and of itself is not unfair, and more than 70 per cent, I think—probably 80 per cent now—of that formula is updated annually. And the point that I was trying to make in the last sentence there was that we're moving into a period now of council tax reform, and that in itself is going to result in some churn to local authorities, and it will have an impact on their tax base. So, we really do have to be careful in terms of how much stress that system can take at one time. But, of course, we continue the discussions with local authorities in that space as well.
So, I'll just conclude, Llywydd, by saying that I commend the settlement to the Senedd. It does reflect our commitment to public services and continues to support local government across Wales to deliver for the people of Wales.

Y Llywydd / The Llywydd: Thank you. The proposal is to agree amendment 1. Does any Member object? [Objection.] Yes, there are objections to amendment 1. We will therefore defer voting until voting time.

Voting deferred until voting time.

Y Llywydd / The Llywydd: The next question is that we agree amendment 2. Does any Member object? [Objection.] There is objection to amendment 2. And therefore we will defer voting on amendment 2.

Voting deferred until voting time.

Y Llywydd / The Llywydd: Which brings us to voting time. And unless three Members wish for the bell to be rung, we will move immediately to our first vote. That vote—[Interruption.]

Y Llywydd / The Llywydd: Okay. I see three Members wishing for the bell to be rung for the vote. We'll ring the bell.

The bell was rung to call Members to the Chamber.

Plenary was suspended at 16:09.
The Senedd reconvened at 16:14, with the Llywydd in the Chair.

6. Voting Time

Y Llywydd / The Llywydd: We are ready now to start voting. The first vote this afternoon is on item 4, the final budget 2024-25. I call for a vote on the motion, tabled in the name of Lesley Griffiths. Open the vote. Close the vote. In favour 28, 13 abstentions, and 15 against. Therefore, the motion is agreed.

Item 4. Debate: The Final Budget 2024-25: For: 28, Against: 15, Abstain: 13
Motion has been agreedClick to see vote results

Y Llywydd / The Llywydd: Item 5 is next, the local government settlement 2024-25. We will first vote on amendment 1, tabled in the name of Darren Millar. Open the vote. I close the vote and exercise my casting vote against amendment 1. The result of the vote, therefore, is that there were 28 in favour, no abstentions, and 29 against. Therefore, amendment 1 is not agreed.

Item 5. Debate: The Local Government Settlement 2024-25. Amendment 1, tabled in the name of Darren Millar: For: 28, Against: 28, Abstain: 0
As there was an equality of votes, the Llywydd used her casting vote in accordance with Standing Order 6.20(ii).
Amendment has been rejectedClick to see vote results

Y Llywydd / The Llywydd: Amendment 2 is next. I call for a vote on amendment 2, tabled in the name of Darren Millar. Open the vote. Close the vote. In favour 15, no abstentions, and 41 against. Therefore the amendment is not agreed.

Item 5. Debate: The Local Government Settlement 2024-25. Amendment 2, tabled in the name of Darren Millar: For: 15, Against: 41, Abstain: 0
Amendment has been rejectedClick to see vote results

Y Llywydd / The Llywydd: The final vote is on the unamended motion tabled in the name of Lesley Griffiths. Open the vote. Close the vote. In favour 28, 13 abstentions, and 15 against. Therefore, the motion is agreed.

Item 5. Debate: The Local Government Settlement 2024-25. Motion : For: 28, Against: 15, Abstain: 13Motion has been agreedClick to see vote results

Y Llywydd / The Llywydd: That brings us to the end of our Plenary proceedings for today. We will now take a break of some 10 minutes before we meet as a Committee of the Whole Senedd to consider Stage 2 proceedings of the Senedd Cymru Bill. The bell will be rung five minutes before we reconvene, and then we will take a break during the committee meeting at around 6.30 p.m. So, we will take that break now.

The meeting ended at 16:17.

QNR

Questions to the First Minister

Adam Price: What discussions has the Welsh Government held with the UK Government about the potential nationalisation of Tata Steel?

Vaughan Gething: The Welsh Government has not held any discussions with the UK Government about the potential nationalisation of Tata Steel.

Llyr Gruffydd: Will the First Minister make a statement on the number of preventable deaths at Betsi Cadwaladr University Health board?

Vaughan Gething: The health board has received 27 prevention of future deaths notices over the last 12 months from the north Wales coroners.

Peredur Owen Griffiths: What is the Government doing to tackle childhood obesity in South Wales East?

Vaughan Gething: 'Healthy Weight: Healthy Wales' is our 10-year strategy for preventing and reducing obesity, with a strong focus on the early years and childhood. Public Health Wales's 10 Steps to a Healthy Weight programme, as part of Every Child Wales, supports children to be a healthy weight from birth.

Gareth Davies: Will the First Minister make a statement on education funding for schools in Denbighshire?

Vaughan Gething: The amount set aside for school budgets is for local authorities to determine, using funding from their local government settlement; the Welsh Government does not fund schools directly. Denbighshire's 2024-25 final settlement is £200.8 million. This represents an increase of 3.8 per cent on the current year on a like-for-like basis.